Moody’s Corp. reported quarterly results that fell short of average analyst estimates, hurt by weaker revenue in its ratings business as rising yields weighed on corporate bond sales, sending its shares lower. The credit rating and financial data company posted net income of $734 million, or $4.24 a diluted share, compared with $646 million, or $3.60 a share in the same period last year. On an adjusted basis, earnings were $4.14 a share, falling short of analysts’ median estimate of $4.27.
Revenue at Moody’s Investors Service business reached $1.087 billion, down about 1% from the same time last year, below analysts’ estimate of $1.132 billion. The company’s shares fell as much as 4.14% in early trading to $455.65, the biggest one-day decline intraday since July. Moody’s did not change its forecasts for the year, including for earnings per share and free cash flow.
Analysts Jason Haas and Keegan Antico at Wells Fargo said they maintained an overweight rating on the company as its analytics business helps offset volatility from the credit ratings segment, though they cautioned on softness in the new issuance market and refinancing risks for junk-rated companies.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing