MCO - Moody's lifts year earnings guidance midpoint after Q2 beat

2023-07-25 08:41:43 ET

Moody's ( NYSE: MCO ) raised its 2023 guidance midpoint for adjusted EPS after Q2 profit and revenue surpassed average analyst estimates. In addition, the provider of credit ratings and risk assessment services and products boosted its expectations for free cash flow and share buybacks.

The company now expects to earn $9.75-$10.25 a share this year, vs. $9.91 consensus, compared with $9.50-$10.00 in the previous outlook.

Revenue is expected to rise in the high-single-digit percent range, vs. the mid-to-high-single-digit percent range in the prior target. Guidance of operating expenses were unchanged at the mid-single-digit percent range.

It sees free cash flow of $1.6B-$1.8B, up from $1.4B-$1.6B in the prior guidance range.

Share buybacks are now expected to be around $500M for the year, up from the previous target of $250M.

Q2 adjusted EPS of $2.30, topping the $2.22 consensus, fell from $2.99 in Q1 and rose from $2.22 in the year-earlier period.

Revenue of $1.49B, vs. $1.45B expected, advanced from $1.47B in Q1 and from $1.38B in Q2 of last year. Moody's Analytics revenue climbed 11% Y/Y to $747M, and Moody's Investors Service revenue gained 6% Y/Y to $747M.

“Moody’s is poised to capitalize on the momentous opportunity of generative AI to activate the power of our unique and verified data sets,” said President and CEO Rob Fauber.

MCO edged up 1% in premarket trading.

Conference call at 12:30 p.m. ET.

More on Moody's:

• SA's Quant system rates MCO a Hold
• Microsoft, Moody's team up to provide data analytics solutions using generative AI
• Moody's: Supreme Business Continuing To Compound

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