We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
S&P Global (SPGI) Q2 Earnings Miss Estimates, '22 Outlook Down
Read MoreHide Full Article
S&P Global Inc. (SPGI - Free Report) reported lower-than-expected second-quarter 2022 results.
Adjusted earnings per share (excluding 5 cents from non-recurring items) of $2.81 missed the consensus mark by 3.4% and decreased 22.4% year over year. Revenues of $2.99 billion missed the consensus estimate by 0.1% but improved 42.1% year over year, backed by strength in every segment, except the Ratings division.
Over the past year, shares of S&P Global have lost 13.7% compared with the 14.8% decline of the industry it belongs to.
Image Source: Zacks Investment Research
Let’s check out the numbers in detail.
Segmental Revenues
Ratings revenues decreased 26% year over year to $796 million. Transaction revenues fell 44% year over year to $344 million due to a decrease in debt issuance across all categories. Non-transaction revenues dipped 1% year over year to $452 million due to lower Issuer Credit Rating revenues and unfavorable foreign exchange.
Market Intelligence adjusted revenues were up 7% year over year to $1.02 billion, primarily driven by double-digit growth in Credit & Risk Solutions.
Commodity Insights revenues increased 74% to $438 million in the second quarter of 2022, primarily driven by the inclusion of IHS Markit, Price Assessments, strong growth in Advisory & Transactional Services, and Energy & Resources Data & Insights.
S&P Dow Jones Indices adjusted revenues grew 12% to $338 million, backed by strength across Data & Custom Subscriptions and exchange-traded derivative activity.
Segment-wise, Ratings’ adjusted operating profit decreased 36% to $464 million, while adjusted operating profit margin decreased 950 bps to 58.4%.
Market Intelligence’s adjusted pro forma operating profit increased 8% to $336 million, while adjusted pro forma operating profit margin increased 40 bps to 33%.
Commodity Insights adjusted pro forma operating profit increased 3% to $188 million, while adjusted pro forma operating profit margin decreased 40 bps to 44%.
S&P Dow Jones’ adjusted pro forma operating profit increased 16% to $243 million. Adjusted pro forma operating profit margin improved 290 bps to 71.9%.
Balance Sheet and Cash Flow
S&P Global exited second-quarter 2022 with cash, cash equivalents and restricted cash of $3.6 billion compared with $4.40 billion at the end of the prior quarter. Long-term debt was $10.8 billion compared with $11.33 billion reported at the end of first-quarter 2022.
SPGI generated $454 million of cash from operating activities in the reported quarter. Capital expenditures were $24 million. Free cash flow was $359 million.
During the second quarter, S&P Global returned $1.8 billion to its shareholders through a combination of $1.5 billion in the form of an accelerated share repurchase (ASR) agreement and $286 million of cash dividends.
Adjusted pro forma revenues are now expected to decline low to mid-single digits.
Adjusted pro forma EPS guidance was updated to $11.35-$11.55 (prior view: $13.00-$13.25). The EPS guidance is below the Zacks Consensus Estimate, which is pegged at $12.14.
Guidance for adjusted pro forma free cash flow (excluding certain items) was also revised to a new range of $4.1-$4.2 billion (prior view: $4.8-$4.9 billion).
Recent Performances of Some Other Business Services Companies
Equifax (EFX - Free Report) reported mixed second-quarter 2022 results, wherein earnings beat estimates but revenues missed the same.
EFX’s adjusted earnings of $2.09 per share beat the Zacks Consensus Estimate by 3% and improved 5.6% on a year-over-year basis. Revenues of $1.32 billion missed the consensus estimate marginally but improved 6.6% year over year.
IQVIA Holdings (IQV - Free Report) reported solid second-quarter 2022 results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate.
IQV’s adjusted earnings per share of $2.44 beat the consensus mark by 2.1% and improved 15% on a year-over-year basis. Total revenues of $3.54 billion outpaced the consensus estimate by 1.2% and increased 3% year over year.
Omnicom Group (OMC - Free Report) reported impressive second-quarter 2022 results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate.
OMC’s earnings of $1.68 per share beat the consensus mark by 7.7% and increased 15.1% year over year, driven by a strong margin performance. Total revenues of $3.6 billion surpassed the consensus estimate by 4.4% but declined slightly year over year.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
S&P Global (SPGI) Q2 Earnings Miss Estimates, '22 Outlook Down
S&P Global Inc. (SPGI - Free Report) reported lower-than-expected second-quarter 2022 results.
Adjusted earnings per share (excluding 5 cents from non-recurring items) of $2.81 missed the consensus mark by 3.4% and decreased 22.4% year over year. Revenues of $2.99 billion missed the consensus estimate by 0.1% but improved 42.1% year over year, backed by strength in every segment, except the Ratings division.
Over the past year, shares of S&P Global have lost 13.7% compared with the 14.8% decline of the industry it belongs to.
Image Source: Zacks Investment Research
Let’s check out the numbers in detail.
Segmental Revenues
Ratings revenues decreased 26% year over year to $796 million. Transaction revenues fell 44% year over year to $344 million due to a decrease in debt issuance across all categories. Non-transaction revenues dipped 1% year over year to $452 million due to lower Issuer Credit Rating revenues and unfavorable foreign exchange.
Market Intelligence adjusted revenues were up 7% year over year to $1.02 billion, primarily driven by double-digit growth in Credit & Risk Solutions.
Commodity Insights revenues increased 74% to $438 million in the second quarter of 2022, primarily driven by the inclusion of IHS Markit, Price Assessments, strong growth in Advisory & Transactional Services, and Energy & Resources Data & Insights.
S&P Dow Jones Indices adjusted revenues grew 12% to $338 million, backed by strength across Data & Custom Subscriptions and exchange-traded derivative activity.
S&P Global Inc. Price, Consensus and EPS Surprise
S&P Global Inc. price-consensus-eps-surprise-chart | S&P Global Inc. Quote
Operating Results
Segment-wise, Ratings’ adjusted operating profit decreased 36% to $464 million, while adjusted operating profit margin decreased 950 bps to 58.4%.
Market Intelligence’s adjusted pro forma operating profit increased 8% to $336 million, while adjusted pro forma operating profit margin increased 40 bps to 33%.
Commodity Insights adjusted pro forma operating profit increased 3% to $188 million, while adjusted pro forma operating profit margin decreased 40 bps to 44%.
S&P Dow Jones’ adjusted pro forma operating profit increased 16% to $243 million. Adjusted pro forma operating profit margin improved 290 bps to 71.9%.
Balance Sheet and Cash Flow
S&P Global exited second-quarter 2022 with cash, cash equivalents and restricted cash of $3.6 billion compared with $4.40 billion at the end of the prior quarter. Long-term debt was $10.8 billion compared with $11.33 billion reported at the end of first-quarter 2022.
SPGI generated $454 million of cash from operating activities in the reported quarter. Capital expenditures were $24 million. Free cash flow was $359 million.
During the second quarter, S&P Global returned $1.8 billion to its shareholders through a combination of $1.5 billion in the form of an accelerated share repurchase (ASR) agreement and $286 million of cash dividends.
Currently, S&P Global carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
2022 Outlook
Adjusted pro forma revenues are now expected to decline low to mid-single digits.
Adjusted pro forma EPS guidance was updated to $11.35-$11.55 (prior view: $13.00-$13.25). The EPS guidance is below the Zacks Consensus Estimate, which is pegged at $12.14.
Guidance for adjusted pro forma free cash flow (excluding certain items) was also revised to a new range of $4.1-$4.2 billion (prior view: $4.8-$4.9 billion).
Recent Performances of Some Other Business Services Companies
Equifax (EFX - Free Report) reported mixed second-quarter 2022 results, wherein earnings beat estimates but revenues missed the same.
EFX’s adjusted earnings of $2.09 per share beat the Zacks Consensus Estimate by 3% and improved 5.6% on a year-over-year basis. Revenues of $1.32 billion missed the consensus estimate marginally but improved 6.6% year over year.
IQVIA Holdings (IQV - Free Report) reported solid second-quarter 2022 results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate.
IQV’s adjusted earnings per share of $2.44 beat the consensus mark by 2.1% and improved 15% on a year-over-year basis. Total revenues of $3.54 billion outpaced the consensus estimate by 1.2% and increased 3% year over year.
Omnicom Group (OMC - Free Report) reported impressive second-quarter 2022 results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate.
OMC’s earnings of $1.68 per share beat the consensus mark by 7.7% and increased 15.1% year over year, driven by a strong margin performance. Total revenues of $3.6 billion surpassed the consensus estimate by 4.4% but declined slightly year over year.