We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
S&P Global (SPGI) Down 4.3% Since Last Earnings Report: Can It Rebound?
Read MoreHide Full Article
It has been about a month since the last earnings report for S&P Global (SPGI - Free Report) . Shares have lost about 4.3% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is S&P Global due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
S&P Global Lags Q2 Earnings Estimates
S&P Global reported lower-than-expected second-quarter 2022 results.
Adjusted earnings per share (excluding 5 cents from non-recurring items) of $2.81 missed the consensus mark by 3.4% and decreased 22.4% year over year. Revenues of $2.99 billion missed the consensus estimate by 0.1% but improved 42.1% year over year, backed by strength in every segment, except the Ratings division.
Let’s check out the numbers in detail.
Segmental Revenues
Ratings revenues decreased 26% year over year to $796 million. Transaction revenues fell 44% year over year to $344 million due to a decrease in debt issuance across all categories. Non-transaction revenues dipped 1% year over year to $452 million due to lower Issuer Credit Rating revenues and unfavorable foreign exchange.
Market Intelligence adjusted revenues were up 7% year over year to $1.02 billion, primarily driven by double-digit growth in Credit & Risk Solutions.
Commodity Insights revenues increased 74% to $438 million in the second quarter of 2022, primarily driven by the inclusion of IHS Markit, Price Assessments, strong growth in Advisory & Transactional Services, and Energy & Resources Data & Insights.
S&P Dow Jones Indices adjusted revenues grew 12% to $338 million, backed by strength across Data & Custom Subscriptions and exchange-traded derivative activity.
Operating Results
Segment-wise, Ratings’ adjusted operating profit decreased 36% to $464 million, while adjusted operating profit margin decreased 950 bps to 58.4%.
Market Intelligence’s adjusted pro forma operating profit increased 8% to $336 million, while adjusted pro forma operating profit margin increased 40 bps to 33%.
Commodity Insights adjusted pro forma operating profit increased 3% to $188 million, while adjusted pro forma operating profit margin decreased 40 bps to 44%.
S&P Dow Jones’ adjusted pro forma operating profit increased 16% to $243 million. Adjusted pro forma operating profit margin improved 290 bps to 71.9%.
Balance Sheet and Cash Flow
S&P Global exited second-quarter 2022 with cash, cash equivalents and restricted cash of $3.6 billion compared with $4.40 billion at the end of the prior quarter. Long-term debt was $10.8 billion compared with $11.33 billion reported at the end of first-quarter 2022.
SPGI generated $454 million of cash from operating activities in the reported quarter. Capital expenditures were $24 million. Free cash flow was $359 million.
During the second quarter, S&P Global returned $1.8 billion to its shareholders through a combination of $1.5 billion in the form of an accelerated share repurchase (ASR) agreement and $286 million of cash dividends.
2022 Outlook
Adjusted pro forma revenues are now expected to decline low to mid-single digits.
Adjusted pro forma EPS guidance was updated to $11.35-$11.55 (prior view: $13.00-$13.25).
Guidance for adjusted pro forma free cash flow (excluding certain items) was also revised to a new range of $4.1-$4.2 billion (prior view: $4.8-$4.9 billion).
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
The consensus estimate has shifted -8.93% due to these changes.
VGM Scores
At this time, S&P Global has a poor Growth Score of F, however its Momentum Score is doing a lot better with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, S&P Global has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
S&P Global (SPGI) Down 4.3% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for S&P Global (SPGI - Free Report) . Shares have lost about 4.3% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is S&P Global due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
S&P Global Lags Q2 Earnings Estimates
S&P Global reported lower-than-expected second-quarter 2022 results.
Adjusted earnings per share (excluding 5 cents from non-recurring items) of $2.81 missed the consensus mark by 3.4% and decreased 22.4% year over year. Revenues of $2.99 billion missed the consensus estimate by 0.1% but improved 42.1% year over year, backed by strength in every segment, except the Ratings division.
Let’s check out the numbers in detail.
Segmental Revenues
Ratings revenues decreased 26% year over year to $796 million. Transaction revenues fell 44% year over year to $344 million due to a decrease in debt issuance across all categories. Non-transaction revenues dipped 1% year over year to $452 million due to lower Issuer Credit Rating revenues and unfavorable foreign exchange.
Market Intelligence adjusted revenues were up 7% year over year to $1.02 billion, primarily driven by double-digit growth in Credit & Risk Solutions.
Commodity Insights revenues increased 74% to $438 million in the second quarter of 2022, primarily driven by the inclusion of IHS Markit, Price Assessments, strong growth in Advisory & Transactional Services, and Energy & Resources Data & Insights.
S&P Dow Jones Indices adjusted revenues grew 12% to $338 million, backed by strength across Data & Custom Subscriptions and exchange-traded derivative activity.
Operating Results
Segment-wise, Ratings’ adjusted operating profit decreased 36% to $464 million, while adjusted operating profit margin decreased 950 bps to 58.4%.
Market Intelligence’s adjusted pro forma operating profit increased 8% to $336 million, while adjusted pro forma operating profit margin increased 40 bps to 33%.
Commodity Insights adjusted pro forma operating profit increased 3% to $188 million, while adjusted pro forma operating profit margin decreased 40 bps to 44%.
S&P Dow Jones’ adjusted pro forma operating profit increased 16% to $243 million. Adjusted pro forma operating profit margin improved 290 bps to 71.9%.
Balance Sheet and Cash Flow
S&P Global exited second-quarter 2022 with cash, cash equivalents and restricted cash of $3.6 billion compared with $4.40 billion at the end of the prior quarter. Long-term debt was $10.8 billion compared with $11.33 billion reported at the end of first-quarter 2022.
SPGI generated $454 million of cash from operating activities in the reported quarter. Capital expenditures were $24 million. Free cash flow was $359 million.
During the second quarter, S&P Global returned $1.8 billion to its shareholders through a combination of $1.5 billion in the form of an accelerated share repurchase (ASR) agreement and $286 million of cash dividends.
2022 Outlook
Adjusted pro forma revenues are now expected to decline low to mid-single digits.
Adjusted pro forma EPS guidance was updated to $11.35-$11.55 (prior view: $13.00-$13.25).
Guidance for adjusted pro forma free cash flow (excluding certain items) was also revised to a new range of $4.1-$4.2 billion (prior view: $4.8-$4.9 billion).
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
The consensus estimate has shifted -8.93% due to these changes.
VGM Scores
At this time, S&P Global has a poor Growth Score of F, however its Momentum Score is doing a lot better with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, S&P Global has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.