Summary
S&P Global Inc. (SPGI), formerly McGraw Hill Financial, Inc., reported strong revenue and operating profit growth for the second quarter and first half of 2013 compared to the prior year. This was largely driven by significant increases in transaction revenue within the S&P Ratings segment, fueled by robust debt issuance in high-yield and investment-grade markets. The S&P Dow Jones Indices segment also showed substantial revenue and profit growth, benefiting from its joint venture. Operationally, the company divested its McGraw-Hill Education business in March 2013, which contributed a significant after-tax gain. This divestiture, along with strategic focus on its core data and analytics services, positions the company for future growth. While expenses increased, particularly in operating-related and selling/general categories driven by investments and prior-year restructuring costs, the company's operating profit saw a considerable increase. Liquidity remains strong, with a significant increase in cash and equivalents and a new credit facility established. Investors should note the positive revenue trends across key segments, the impact of the MHE divestiture, and the ongoing strategic investments. The company also highlighted its commitment to shareholder returns through dividend increases and share repurchases.
Financial Highlights
50 data points| Revenue | $1.21B |
| Cost of Revenue | $395.00M |
| Gross Profit | $810.00M |
| SG&A Expenses | $384.00M |
| Operating Expenses | $814.00M |
| Operating Income | $423.00M |
| Interest Expense | $16.00M |
| Net Income | $254.00M |
| EPS (Basic) | $0.93 |
| EPS (Diluted) | $0.91 |
| Shares Outstanding (Basic) | 274.30M |
| Shares Outstanding (Diluted) | 278.30M |
Key Highlights
- 1Total revenue increased by 17% for the three months ended June 30, 2013, and 15% for the six months ended June 30, 2013, compared to the prior year.
- 2Operating profit saw a substantial increase of 42% for the quarter and 21% for the six months, indicating improved profitability.
- 3The S&P Ratings segment experienced strong transaction revenue growth (41% for the quarter, 39% for the six months) driven by increased debt issuance.
- 4S&P Dow Jones Indices revenue grew by 39% for the quarter and 42% for the six months, largely due to its joint venture.
- 5The company completed the sale of McGraw-Hill Education (MHE) on March 22, 2013, recording an after-tax gain of $612 million in discontinued operations for the six months ended June 30, 2013.
- 6Cash and equivalents increased significantly to $1.9 billion as of June 30, 2013, from $760 million at the end of 2012.
- 7The company increased its quarterly dividend by 10% to $0.28 per share, effective January 30, 2013, and repurchased $500 million of its common stock through an accelerated share repurchase program.