Moody’s Corporation (MCO) Beats EPS Consensus

Moody’s Corporation (MCO) Beats EPS Consensus
By Moody's Corporation (Moody's Corporation) [Public domain], via Wikimedia Commons

Moody’s Corporation (NYSE:MCO) announced its second quarter earnings before opening bell this morning. Reported earnings per share rose 32% to $1 per share. Revenue increased 18% from the same quarter a year ago to $756 million. Analysts were expecting the company to report earnings of 90 cents per share on $722.24 million in revenue.

Moody's Corporation (MCO) Beats EPS Consensus

Moody’s reports strong growth in its businesses

According to this morning’s announcement, Moody’s Corporation (NYSE:MCO) posted gains in all of its businesses. Moody’s Investors Service revenue increase 22% year over year, including a 21% gain in the U.S. Global corporate finance revenue rose 37%, with a 28% increase in the U.S.

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Global structured finance revenue rose 7% year over year. Strength in commercial mortgage-backed securities in the U.S. drove a 29% increase in structured finance revenue in the U.S. Outside the U.S., it declined 17% due to weaker volumes of European residential mortgage-backed and asset-backed securities.

Global financial institutions revenue rose 9%, while global public, project and infrastructure finance revenue increased 14% year over year. Moody’s Analytics saw its global revenue increase 10%. Research, data and analytics revenue rose 7% year over year.

Moody’s updates capital allocation plans

During the second quarter, Moody’s Corporation (NYSE:MCO) bought back 4.1 million shares at a cost of $259.1 million. It also issued 1.7 million shares to employees as part of stock-based compensation plans.

This morning the company declared a regular quarterly dividend of 25 cents per share, which is a 25% increase from the previous dividend. It will be payable Sept. 10 to shareholders of record on Aug. 20.

Moody’s updates 2013 guidance

Moody’s Corporation (NYSE:MCO) maintained its previous full-year non-GAAP earnings per share range of between $3.49 and $3.59 per share. The company did not include the impact of the charge it will take this year for settling litigation. Moody’s Corporation (NYSE:MSO) shares soared in April after it announced that settlement, which was in connection with allegations that it misled investors about the safety of certain debt vehicles it had rated.

The firm is still looking for full-year revenue growth to be in the high single-digit percentage range.

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