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Moody's (MCO) Beats on Q1 Earnings as Bond Issuances Rise
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Moody's (MCO - Free Report) reported first-quarter 2024 adjusted earnings of $3.37 per share, which outpaced the Zacks Consensus Estimate of $3.06. The bottom line also grew 13% from the year-ago quarter figure.
Improvement in global bond issuance volumes and steady demand for analytics supported Moody’s results. The company’s liquidity position was robust during the quarter. However, an increase in operating expenses posed a headwind.
After taking into consideration certain non-recurring items, net income attributable to Moody's was $577 million or $3.15 per share, up from $501 million or $2.72 per share in the prior-year quarter.
Revenues Up, Costs Rise
Quarterly revenues were $1.79 billion, which beat the Zacks Consensus Estimate of $1.73 billion. Also, the top line jumped 21% year over year.
Total expenses were $982 million, up 8% year over year.
Adjusted operating income of $906 million was up 38%. Adjusted operating margin was 44.8%, rising from 37.7% a year ago.
Solid Segment Performance
Moody’s Investors Service revenues surged 35% year over year to $987 million. The improvement was mainly driven by solid Corporate Finance, a favorable mix in Public, Project and Infrastructure Finance and improvement in Structured Finance revenues.
Moody’s Analytics revenues increased 9% to $799 million. This was mainly driven by robust growth in all lines of business.
Strong Balance Sheet
As of Mar 31, 2024, Moody’s had total cash, cash equivalents and short-term investments of $2.53 billion, up from $2.19 billion as of Dec 31, 2023.
The company had $6.9 billion in outstanding debt and $1.25 billion in additional borrowing capacity under the revolving credit facility.
Share Repurchase Update
During the quarter, Moody's repurchased 0.3 million shares at an average price of $384.2 per share.
Solid 2024 Guidance
Moody’s expects adjusted earnings to be in the range of $10.40-$11.00 per share, narrower than previous guidance of $10.25-$11.00.
On a GAAP basis, earnings are now projected to be within $9.55-$10.15 per share. Earlier, management expected GAAP earnings to be in the range of $9.45-$10.20 per share.
Moody’s projects revenues to increase in the high-single-digit to low-double-digit percent range.
Operating expenses are expected to rise in the mid-to-high-single-digit percent range.
Our Take
Moody’s remains well-positioned for growth on the back of a solid market position, strength in diverse operations and strategic acquisitions. However, elevated operating expenses and geopolitical and macroeconomic concerns are likely to hurt its financials.
Moody's Corporation Price, Consensus and EPS Surprise
Credit Acceptance Corporation’s (CACC - Free Report) first-quarter 2024 earnings of $5.08 per share missed the Zacks Consensus Estimate of $6.81. The bottom line reflects a 33.2% decline from the prior-year quarter. These figures include certain non-recurring items.
CACC’s results were primarily hurt by an increase in operating expenses and higher provisions. Nevertheless, improvements in GAAP revenues and consumer loan assignment volumes were positives.
LendingTree, Inc.’s (TREE - Free Report) first-quarter 2024 adjusted net income per share of 70 cents beat the Zacks Consensus Estimate of 46 cents. The reported figure compares favorably with 25 cents reported in the prior-year quarter.
TREE’s results were aided by lower costs, while a decline in revenues was a spoilsport.
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Moody's (MCO) Beats on Q1 Earnings as Bond Issuances Rise
Moody's (MCO - Free Report) reported first-quarter 2024 adjusted earnings of $3.37 per share, which outpaced the Zacks Consensus Estimate of $3.06. The bottom line also grew 13% from the year-ago quarter figure.
Improvement in global bond issuance volumes and steady demand for analytics supported Moody’s results. The company’s liquidity position was robust during the quarter. However, an increase in operating expenses posed a headwind.
After taking into consideration certain non-recurring items, net income attributable to Moody's was $577 million or $3.15 per share, up from $501 million or $2.72 per share in the prior-year quarter.
Revenues Up, Costs Rise
Quarterly revenues were $1.79 billion, which beat the Zacks Consensus Estimate of $1.73 billion. Also, the top line jumped 21% year over year.
Total expenses were $982 million, up 8% year over year.
Adjusted operating income of $906 million was up 38%. Adjusted operating margin was 44.8%, rising from 37.7% a year ago.
Solid Segment Performance
Moody’s Investors Service revenues surged 35% year over year to $987 million. The improvement was mainly driven by solid Corporate Finance, a favorable mix in Public, Project and Infrastructure Finance and improvement in Structured Finance revenues.
Moody’s Analytics revenues increased 9% to $799 million. This was mainly driven by robust growth in all lines of business.
Strong Balance Sheet
As of Mar 31, 2024, Moody’s had total cash, cash equivalents and short-term investments of $2.53 billion, up from $2.19 billion as of Dec 31, 2023.
The company had $6.9 billion in outstanding debt and $1.25 billion in additional borrowing capacity under the revolving credit facility.
Share Repurchase Update
During the quarter, Moody's repurchased 0.3 million shares at an average price of $384.2 per share.
Solid 2024 Guidance
Moody’s expects adjusted earnings to be in the range of $10.40-$11.00 per share, narrower than previous guidance of $10.25-$11.00.
On a GAAP basis, earnings are now projected to be within $9.55-$10.15 per share. Earlier, management expected GAAP earnings to be in the range of $9.45-$10.20 per share.
Moody’s projects revenues to increase in the high-single-digit to low-double-digit percent range.
Operating expenses are expected to rise in the mid-to-high-single-digit percent range.
Our Take
Moody’s remains well-positioned for growth on the back of a solid market position, strength in diverse operations and strategic acquisitions. However, elevated operating expenses and geopolitical and macroeconomic concerns are likely to hurt its financials.
Moody's Corporation Price, Consensus and EPS Surprise
Moody's Corporation price-consensus-eps-surprise-chart | Moody's Corporation Quote
Currently, Moody’s carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Finance Stocks
Credit Acceptance Corporation’s (CACC - Free Report) first-quarter 2024 earnings of $5.08 per share missed the Zacks Consensus Estimate of $6.81. The bottom line reflects a 33.2% decline from the prior-year quarter. These figures include certain non-recurring items.
CACC’s results were primarily hurt by an increase in operating expenses and higher provisions. Nevertheless, improvements in GAAP revenues and consumer loan assignment volumes were positives.
LendingTree, Inc.’s (TREE - Free Report) first-quarter 2024 adjusted net income per share of 70 cents beat the Zacks Consensus Estimate of 46 cents. The reported figure compares favorably with 25 cents reported in the prior-year quarter.
TREE’s results were aided by lower costs, while a decline in revenues was a spoilsport.