8-KOther Events

S&P Global Inc. 8-K Report (Jul 29, 2003)

Filed July 29, 2003For Securities:SPGI

Summary

The McGraw-Hill Companies (now S&P Global Inc.) reported its second-quarter 2003 results on July 29, 2003. The company achieved a 7.2% increase in diluted earnings per share (EPS) from continuing operations, reaching $0.74, which exceeded the First Call consensus forecast of $0.73. This performance was driven by solid global gains in its Financial Services segment, growth in college and university sales within its Education division, and effective cost containment measures, aided by favorable foreign exchange rates. Overall operating revenue for the quarter saw a 1.3% increase to $1.2 billion. While the Financial Services segment demonstrated robust growth, particularly in ratings markets and structured finance, the Education and Information & Media Services segments experienced revenue declines. The company maintained its positive outlook for the full year, guiding for a 7-9% increase in EPS, indicating confidence in continued growth despite some economic uncertainties and softness in advertising markets.

Key Highlights

  • 1Diluted EPS from continuing operations increased by 7.2% to $0.74 in Q2 2003, surpassing analyst expectations.
  • 2Total operating revenue grew by 1.3% to $1.2 billion for the second quarter.
  • 3The Financial Services segment was a key driver, with revenue up 9.7% and operating profit up 12.3% due to strong performance in ratings and structured finance.
  • 4McGraw-Hill Education segment revenue decreased by 2.6% and operating profit declined by 15.0%, impacted by tougher year-over-year comparisons and softness in some educational markets.
  • 5Information and Media Services segment revenue declined by 4.2%, with softness in advertising affecting BusinessWeek and other publications.
  • 6The company divested S&P ComStock in February 2003, impacting year-over-year net income comparisons but contributing positively to the first half's net income due to a gain on sale.
  • 7Full-year 2003 EPS growth guidance remains at 7-9%, reflecting confidence in sustained performance.

Frequently Asked Questions

The primary drivers for the 7.2% increase in diluted EPS from continuing operations were solid global gains in the Financial Services segment, growth in worldwide college and university sales, effective cost containment, and favorable foreign exchange rates.

The Financial Services segment performed exceptionally well, with revenue up 9.7% and operating profit up 12.3%, driven by strong performance in ratings and securitization markets. However, the McGraw-Hill Education segment saw a 2.6% revenue decrease and a 15.0% operating profit decline, while the Information and Media Services segment experienced a 4.2% revenue drop, both facing challenges like tougher comparisons and advertising softness.

Yes, the company divested S&P ComStock in February 2003. While this impacted year-over-year comparisons, it also resulted in a significant gain on sale for the first half of 2003, contributing to a larger increase in reported net income for that period.

The company maintains its positive outlook for 2003, guiding for a 7-9% increase in earnings per share, which includes a non-cash adjustment related to pension accounting. This guidance suggests confidence in continued growth despite ongoing economic uncertainties.