What was the primary driver of revenue growth in the second quarter of 2014?

Revenue growth in the second quarter of 2014 was primarily driven by increases across most segments. Specifically, S&P Ratings benefited from strong corporate bond issuance and bank loan ratings, S&P Capital IQ saw growth from higher average contract values for its Desktop and RatingsXpress® products, and S&P Dow Jones Indices experienced a rise due to increased assets under management for ETFs and mutual funds.

How is the company managing its expenses?

The company has shown improved profitability, partly due to effective expense management. While some operating-related expenses increased due to higher compensation and technology costs, selling and general expenses decreased significantly year-over-year for the six-month period, partly due to the absence of costs related to the separation of McGraw-Hill Education (MHE) and legal settlements that impacted the prior year. The company also benefits from cost-saving initiatives and a focus on operational excellence across its segments.

What are the main legal and regulatory issues facing the company?

The company is involved in ongoing legal proceedings, including actions brought by state attorneys general and civil proceedings related to Parmalat. Notably, S&P Ratings received a 'Wells Notice' from the SEC regarding its ratings of certain commercial mortgage-backed securities transactions from 2011, which could potentially lead to an enforcement action. The company states that it vigorously defends these claims and believes they have no basis, and it currently does not expect a material adverse effect on its financial statements.

SPGI 10-Q Quarterly Report Q2 FY2014 — Revenue, Net Income, EPS

Summary

S&P Global Inc. (SPGI), formerly McGraw Hill Financial, Inc., reported solid financial performance for the second quarter and first six months of 2014. Revenue for both periods saw a notable increase, driven by growth across its key segments: S&P Ratings, S&P Capital IQ, and S&P Dow Jones Indices. The company demonstrated improved profitability, with operating profit rising significantly year-over-year, reflecting effective cost management and revenue synergies. Despite ongoing legal proceedings and regulatory scrutiny, particularly concerning S&P Ratings, the company maintains a strong balance sheet and positive cash flow from operations. Shareholder returns were supported by dividend increases and ongoing share repurchase programs. Investors should note the continued strategic focus on essential intelligence for capital, commodities, and commercial markets, with an emphasis on innovation and operational excellence. The company is also navigating potential impacts from new accounting standards expected to be implemented in the coming years.

Financial Highlights

50 data points

Beta

Revenue

$1.30B

0.7% Gross Margin

Net Income

$292.00M

0.2% Net Margin

EPS (Diluted)

$1.06

Total Assets

$6.06B

Cash & Equivalents

$1.62B

Free Cash Flow

$332.00M

Financial Statements

Beta

Revenue	$1.30B
Cost of Revenue	$407.00M
Gross Profit	$895.00M
SG&A Expenses	$376.00M
Operating Expenses	$817.00M
Operating Income	$476.00M
Interest Expense	$14.00M
Net Income	$292.00M
EPS (Basic)	$1.08
EPS (Diluted)	$1.06
Shares Outstanding (Basic)	271.50M
Shares Outstanding (Diluted)	276.10M

Key Highlights

1Revenue increased by 8% to $1,346 million for the three months ended June 30, 2014, and by 6% to $2,581 million for the six months ended June 30, 2014, compared to the prior year periods.
2Operating profit rose by 12% to $486 million for the quarter and by 28% to $916 million for the first six months, indicating improved operational efficiency and profitability.
3Diluted earnings per share from continuing operations increased by 18% to $1.06 for the quarter and by 36% to $1.95 for the six months, demonstrating strong earnings growth.
4S&P Ratings saw revenue growth driven by increased corporate bond issuance and bank loan ratings, alongside stable non-transaction revenue from annual fees.
5S&P Capital IQ experienced revenue growth attributed to higher average contract values for its Desktop and RatingsXpress® offerings.
6S&P Dow Jones Indices benefited from higher average assets under management for ETFs and mutual funds, contributing to significant revenue and operating profit increases.
7The company repurchased 2.2 million shares for $177 million in the second quarter of 2014 as part of its ongoing share repurchase program.

S&P Global Inc. Quarterly Report for Q2 Ended Jun 30, 2014

Summary

Financial Highlights

Key Highlights

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