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Moody's Corporation : Post Earnings Coverage as Moody's Q1 Adjusted EPS Surged 58% Y-o-Y to Beat Estimates

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05/23/2017 | 02:33pm CEST

Upcoming AWS Coverage on TriNet Group Post-Earnings Results

LONDON, UK / ACCESSWIRE / May 23, 2017 / Active Wall St. announces its post-earnings coverage on Moody's Corp. (NYSE: MCO). The Company posted its financial results for the first quarter fiscal 2017 (Q1 FY17) on May 05, 2017. The New York-based Company reported a 19% growth in revenues, while its adjusted EPS surged 58% y-o-y, beating market consensus estimates. Register with us now for your free membership at:


One of Moody's' competitors within the Business Services space, TriNet Group, Inc. (NYSE: TNET), reported on May 02, 2017, its financial results for Q1 ended March 31, 2017. AWS will be initiating a research report on TriNet in the coming days.

Today, AWS is promoting its earnings coverage on MCO; touching on TNET. Get our free coverage by signing up to


Earnings Reviewed

During the three months ended on March 31, 2017, Moody's reported revenues of $975.2 million, up from $816.1 million recorded at the end of Q1 FY16. Revenues numbers for the reported quarter outperformed market expectations of $911.1 million. The Company's US revenue rose 20% y-o-y to $577.8 million, while its non-US revenue was up by 18% y-o-y to $397.4 million in Q1 FY17. Furthermore, US constituted 41% of total revenue in Q1 FY17, which is consistent with the prior-year's comparable period.

The credit rating Company reported GAAP net income of $345.6 million, or $1.78 per diluted share, in Q1 FY17 above the $184.4 million, or $0.93 per diluted share, in Q1 FY16. Furthermore, the Company's non-GAAP net income for Q1 FY17 came in at $285.9 million, or $1.47 per diluted share, compared to $184.4 million, or $0.93 per diluted share, in Q1 FY16. Wall Street had forecasted adjusted earnings of $1.23 per diluted share for Q1 FY17.

Operating Metrics

For the quarter ended on March 31, 2017, the financial research Company reported operating income of $443.4 million, or 45.5% on revenue, compared to $304.1 million, or 37.3% of revenue, in the prior year's same quarter. The Company's adjusted operating income improved to $475.9 million, or 48.8% of revenues, in Q1 FY17 from $334.0 million, or 40.9% of revenues, in the year ago corresponding quarter.

Furthermore, Moody's total expense for Q1 FY17 came in at $531.8 million, up 4% y-o-y, primarily attributable to higher accruals for incentive compensation and acquisition of GGY in March 2016, partially offset by a favorable foreign currency translation impact of 1%.

Segment Performance

During Q1 FY17, Moody's Investors Service revenue grew 27% to $668.2 million from $525.1 million in the year ago same period. The segment's US revenue came in at $422.5 million, up 26%, while its non-US revenue surged 30% y-o-y to $245.7 million in Q1 FY17.

Moody's Analytics global revenue for Q1 FY17 came in at $307.0 million, which was 5% higher than last year's recorded revenues of $291.0 million. The division's US revenue for Q1 FY16 was $155.3 million, up 8% y-o-y; whereas non-US revenue grew 3% y-o-y to $151.7 million. In the reported quarter, foreign currency translation had an unfavorable impact on the segment's revenues by 1%.

Cash Flow and Balance Sheet

Moody's reported net cash flows used in operating activities of $512.4 million in the first three months of fiscal 2017 versus to cash provided by operating activities of $253.6 million in the year ago comparable quarter. The Company reported a negative free cash flow of $531.1 million in Q1 FY17 versus to a positive free cash flow of $227.3 million in the prior year's comparable quarter.

As on March 31, 2017 the Company had cash and cash equivalents balance of $2.13 billion compared to $2.05 billion at the close of books on December 31, 2016. Furthermore, the Company ended the quarter with total debt of $4.08 billion, up from $3.36 billion as on December 31, 2016.

Dividend and Repurchase

In a separate press release on April 25, 2017, Moody's Board of Directors declared a regular quarterly dividend of $0.38 per share. The dividend will be payable on June 12, 2017, to stockholders of record at the close of business on May 22, 2017.

During Q1 FY17, the Company repurchased 0.50 million shares worth $55.0 million at an average price of $112.24 per share. As of March 31, 2017, Moody's had $0.7 billion remaining under its share repurchase authority. Furthermore, Moody's issued 1.5 million shares as part of its annual employee stock-based compensation plans in the reported quarter.


In its guidance for full year FY17, Moody's expects total revenue to rise in the mid-single-digit percent range. The Company increased its FY17 GAAP EPS guidance to the range of $5.46 to $5.61 from its previously provided range of $5.15 to $5.30. The non-GAAP EPS is forecasted to be between $5.15 and $5.30. Furthermore, the Company expects free cash for FY17 to be approximately $500 million.

Stock Performance

At the closing bell, on Monday, May 22, 2017, Moody's share price finished the trading session at $114.97, slightly up 0.19%. A total volume of 541.90 thousand shares exchanged hands. The stock has surged 13.61% and 22.53% in the last six months and past twelve months, respectively. Furthermore, since the start of the year, shares of the Company have rallied 21.96%. The stock is trading at a PE ratio of 53.42 and has a dividend yield of 1.32%.

Active Wall Street:

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AWS has not been compensated; directly or indirectly; for producing or publishing this document.


The non-sponsored content contained herein has been prepared by a writer (the "Author") and is fact checked and reviewed by a third party research service company (the "Reviewer") represented by a credentialed financial analyst, for further information on analyst credentials, please email [email protected]. Rohit Tuli, a CFA® charterholder (the "Sponsor"), provides necessary guidance in preparing the document templates. The Reviewer has reviewed and revised the content, as necessary, based on publicly available information which is believed to be reliable. Content is researched, written and reviewed on a reasonable-effort basis. The Reviewer has not performed any independent investigations or forensic audits to validate the information herein. The Reviewer has only independently reviewed the information provided by the Author according to the procedures outlined by AWS. AWS is not entitled to veto or interfere in the application of such procedures by the third-party research service company to the articles, documents or reports, as the case may be. Unless otherwise noted, any content outside of this document has no association with the Author or the Reviewer in any way.


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© Accesswire 2017
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Financials ($)
Sales 2017 3 837 M
EBIT 2017 1 658 M
Net income 2017 1 050 M
Debt 2017 1 502 M
Yield 2017 1,30%
P/E ratio 2017 20,62
P/E ratio 2018 19,98
EV / Sales 2017 6,12x
EV / Sales 2018 5,64x
Capitalization 21 962 M
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Duration : Period :
Moody's Corporation Technical Analysis Chart | MCO | US6153691059 | 4-Traders
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Technical analysis trends MOODY'S CORPORATION
Short TermMid-TermLong Term
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Mean consensus HOLD
Number of Analysts 13
Average target price 120 $
Spread / Average Target 4,5%
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EPS Revisions
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Raymond W. McDaniel President, Chief Executive Officer & Director
Henry K. McKinnell Chairman
Linda S. Huber Chief Financial Officer & Executive Vice President
Tony Stoupas Chief Information Officer & Senior Vice President
Basil L. Anderson Independent Director
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