Summary
S&P Global Inc. (SPGI) reported strong financial performance for the third quarter and first nine months of 2019, with significant increases in revenue and operating profit compared to the prior year. The company's diversified business segments, including Ratings, Market Intelligence, Platts, and Indices, all contributed to this growth, driven by factors such as increased corporate bond ratings revenue, strong demand for market data, and higher asset management fees. Profitability was boosted by operational efficiencies and strategic divestitures, including the sale of RigData and SPIAS, which resulted in gains. Despite some increased operating costs related to technology and compensation, the company demonstrated effective cost management, leading to substantial year-over-year improvements in operating profit and diluted earnings per share. SPGI also continued its commitment to returning capital to shareholders through share repurchases and dividends, reinforcing its financial strength and positive outlook.
Financial Highlights
51 data points| Revenue | $1.69B |
| Cost of Revenue | $480.00M |
| Gross Profit | $1.21B |
| SG&A Expenses | $318.00M |
| Operating Expenses | $847.00M |
| Operating Income | $891.00M |
| Net Income | $617.00M |
| EPS (Basic) | $2.52 |
| EPS (Diluted) | $2.50 |
| Shares Outstanding (Basic) | 245.00M |
| Shares Outstanding (Diluted) | 246.50M |
Key Highlights
- 1Revenue increased by 9% to $1.7 billion for the third quarter and by 5% to $5.0 billion for the first nine months of 2019, demonstrating consistent top-line growth across all segments.
- 2Operating profit saw a significant increase of 27% to $891 million for the third quarter and 15% to $2.4 billion for the first nine months, highlighting strong operational leverage and efficiency.
- 3Diluted earnings per share (EPS) grew by 28% to $2.50 for the third quarter and by 12% to $6.40 for the first nine months, reflecting improved profitability and shareholder value.
- 4The company completed the divestitures of RigData and Standard & Poor's Investment Advisory Services LLC (SPIAS), contributing a total pre-tax gain of $49 million, which positively impacted earnings.
- 5Shareholder returns remained a priority, with $1.14 billion in share repurchases and $421 million in dividends paid for the first nine months of 2019, underscoring a commitment to capital allocation.
- 6Despite some increased operating expenses, notably in technology and compensation, S&P Global managed these costs effectively, with operating-related expenses increasing by only 7% and selling and general expenses decreasing by 5% year-over-year for the third quarter.
- 7The Ratings segment showed robust performance with a 13% revenue increase driven by higher corporate bond and bank loan ratings, while Market Intelligence and Indices also reported solid revenue growth.
- 8The company's liquidity remains strong, with cash, cash equivalents, and restricted cash totaling $2.0 billion as of September 30, 2019, supporting ongoing investments and capital returns.