Moody's Corp. (MCO) Misses Q1 EPS by 1c, Lowers FY EPS Guidance

Moody's Corp. (NYSE: MCO) reported Q1 EPS of $2.89, $0.01 worse than the analyst estimate of $2.90. Revenue for the quarter came in at $1.5 billion versus the consensus estimate of $1.51 billion.

GUIDANCE:

Moody's Corp. sees FY2022 EPS of $10.75-$11.25, versus the consensus of $11.91.

• Moody’s updated outlook for full year 2022, as of May 2, 2022, reflects assumptions about numerous factors that could affect its business and is based on currently available information reviewed by management through and as of today’s date. These assumptions include, but are not limited to, the effects of interest rates, inflation, foreign currency exchange rates, capital markets’ liquidity and activity in different sectors of the debt markets. This outlook also reflects assumptions about general economic conditions, global GDP growth, the scale and duration of the crisis in Ukraine and the impact of COVID-19, as well as the Company’s own operations and personnel. These assumptions are subject to increased uncertainty as a result of the crisis in Ukraine, and actual full year 2022 results could differ materially from Moody’s current outlook.
• This outlook incorporates various specific macroeconomic assumptions, including: (a) 2022 U.S. and Euro area GDPs to expand by approximately 3.5% - 4.5% and 2.5% - 3.5%, respectively; (b) global benchmark rates to increase from historic lows; (c) U.S. high yield interest rate spreads to widen, moving slightly above the historical average of approximately 500 bps; (d) inflation rates to remain elevated and above central bank targets in many countries; (e) U.S. unemployment to remain low at approximately 3.5%; and (f) the global high yield default rate to initially decline before gradually rising to approximately 2.7% by the end of 2022.
• MIS’s revenue guidance assumes that full year 2022 global rated issuance will decrease in the mid-teens percent range.
• In addition, Moody’s guidance assumes foreign currency translation. Specifically, our forecast for the remainder of 2022 reflects exchange rates for the British pound (£) of $1.32 to £1 and for the euro (€) of $1.11 to €1.
• Full year 2022 guidance assumes share repurchases of at least $1.5 billion, subject to available cash, market conditions, M&A opportunities and other ongoing capital allocation decisions.
• Full year 2022 diluted EPS is projected to be $9.85 to $10.35. The Company expects full year 2022 adjusted diluted EPS1 to be $10.75 to $11.25.

For earnings history and earnings-related data on Moody's Corp. (MCO) click here.

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