Summary
S&P Global Inc. (SPGI) reported solid financial results for the second quarter and first half of 2018, demonstrating robust revenue growth across its key segments. Total revenue increased by 7% for both the three and six-month periods compared to the prior year, driven by strong performance in Ratings, Market Intelligence, and Indices. The acquisition of Kensho in April 2018 is beginning to be integrated, contributing to growth and expanded technological capabilities. Profitability remained strong, with operating profit increasing by 1% for the quarter and 6% for the first half, despite a significant legal settlement expense in 2018. Diluted Earnings Per Share (EPS) saw a notable increase of 12% for the quarter and 19% for the first half, reflecting operational efficiency and the positive impact of the Tax Cuts and Jobs Act. The company also continued its commitment to shareholder returns through increased dividends and substantial share repurchases.
Financial Highlights
51 data points| Revenue | $1.61B |
| Cost of Revenue | $441.00M |
| Gross Profit | $1.17B |
| SG&A Expenses | $444.00M |
| Operating Expenses | $937.00M |
| Operating Income | $672.00M |
| Net Income | $461.00M |
| EPS (Basic) | $1.83 |
| EPS (Diluted) | $1.82 |
| Shares Outstanding (Basic) | 251.10M |
| Shares Outstanding (Diluted) | 253.30M |
Key Highlights
- 1Revenue increased by 7% year-over-year for both the three and six months ended June 30, 2018, reaching $1.61 billion and $3.18 billion respectively, driven by growth across all reportable segments.
- 2Operating profit saw a modest increase of 1% for the quarter to $672 million and a more substantial 6% increase for the six months to $1.38 billion, indicating strong operational leverage.
- 3Diluted Earnings Per Share (EPS) grew significantly by 12% for the quarter ($1.82) and 19% for the six months ($3.75), demonstrating improved profitability on a per-share basis.
- 4The acquisition of Kensho Technologies Inc. in April 2018 for approximately $550 million is noted as contributing to revenue and enhancing technological capabilities, with its results included in 'Corporate'.
- 5Significant share repurchases continued, with $1.1 billion utilized in the first half of 2018, including a $1 billion accelerated share repurchase (ASR) agreement, reflecting a strong commitment to returning capital to shareholders.
- 6The company increased its quarterly dividend by 22% to $0.50 per share, signaling confidence in its financial performance and future outlook.
- 7The effective income tax rate decreased from 28.6% in Q2 2017 to 23.8% in Q2 2018, primarily due to the reduction in the U.S. federal corporate tax rate from the Tax Cuts and Jobs Act.