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S&P Global (SPGI) Q3 Earnings Beat Estimates, 2022 View Tepid
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S&P Global Inc. (SPGI - Free Report) reported mixed third-quarter 2022 results, wherein earnings beat the Zacks Consensus Estimate but revenues missed the same.
Adjusted earnings per share (excluding $1.09 from non-recurring items) of $2.93 beat the consensus mark by 5% but decreased 17.2% year over year. Revenues of $2.86 billion missed the consensus estimate by 1.6% but improved 37.1% year over year, backed by strength in every segment, except the Ratings division.
Over the past year, shares of S&P Global have lost 33.2% compared with the 20.7% decline of the industry it belongs to.
Image Source: Zacks Investment Research
Let’s check out the numbers in detail.
Segmental Revenues
Ratings revenues decreased 33% year over year to $681 million. Transaction revenues fell 56% year over year to $244 million due to a decrease in debt issuance across all categories. Non-transaction revenues dipped 6% year over year to $437 million due to lower Issuer Credit Rating revenues and an unfavorable foreign exchange.
Market Intelligence adjusted revenues were up 4% year over year to $1.02 billion, primarily driven by strong growth in Credit & Risk Solutions as well as Data & Advisory Solutions.
Commodity Insights revenues increased 70% to $432 million in the third quarter of 2022, primarily driven by the inclusion of IHS Markit, Price Assessments and strong growth in Energy & Resources Data & Insights.
S&P Dow Jones Indices adjusted revenues grew 3% to $334 million, backed by strength across Data & Custom Subscriptions and an exchange-traded derivative activity.
Operating Results
Segment-wise, Ratings’ adjusted operating profit decreased 41% to $381 million, while adjusted operating profit margin decreased 750 bps to 55.9%.
Market Intelligence’s adjusted operating profit increased 13% to $345 million, while adjusted pro forma operating profit margin increased 260 bps to 33.9%.
Commodity Insights adjusted operating profit increased 9% to $198 million, while adjusted operating profit margin increased 190 bps to 45.8%.
S&P Dow Jones’ adjusted operating profit increased 5% to $234 million. Adjusted operating profit margin improved 100 bps to 70.3%.
Balance Sheet and Cash Flow
S&P Global exited third-quarter 2022 with cash, cash equivalents and restricted cash of $1.4 billion compared with $3.6 billion at the end of the prior quarter. Long-term debt was $10.7 billion compared with $10.8 billion reported at the end of second-quarter 2022.
SPGI generated $814 million of cash from operating activities in the reported quarter. Capital expenditures were $21 million. Free cash flow was $722 million.
During the third quarter, S&P Global returned more than $11.7 billion to its shareholders through a combination of $11 billion in the form of an accelerated share repurchase (ASR) agreement and $749 million of cash dividends.
Currently, S&P Global carries a Zacks Rank #4 (Sell).
Adjusted pro forma revenues are now expected to decline mid-single digits (prior view: decline low-to-mid-single digits).
Adjusted pro forma EPS guidance was updated to $11.00-$11.15 (prior view: $11.35-$11.55). The EPS guidance is below the Zacks Consensus Estimate, which is pegged at $11.37.
Guidance for adjusted pro forma free cash flow (excluding certain items) was also revised to $4 billion (prior view: $4.1-$4.2 billion).
Recent Releases
Omnicom Group Inc. (OMC - Free Report) reported impressive third-quarter 2022 results, wherein both earnings and revenues surpassed the respective Zacks Consensus Estimate.
Earnings of $1.77 per share beat the consensus mark by 7.9% and increased 7.3% year over year, driven by a strong margin performance. Total revenues of $3.4 billion surpassed the consensus estimate by 3% and increased slightly year over year.
Equifax Inc. (EFX - Free Report) reported stellar third-quarter 2022 results, wherein both earnings and revenues surpassed the respective Zacks Consensus Estimate.
Adjusted earnings (excluding 39 cents from non-recurring items) of $1.73 per share beat the Zacks Consensus Estimate by 5.5% but decreased 6.5% on a year-over-year basis. However, revenues of $1.24 billion beat the consensus estimate by 2.3% and improved 1.8% year over year on a reported basis and 4% on a local-currency basis.
The Interpublic Group of Companies, Inc. (IPG - Free Report) reported better-than-expected third-quarter 2022 results.
Adjusted earnings (excluding a penny from non-recurring items) of 63 cents per share beat the Zacks Consensus Estimate by 6.8%. The bottom line has been constant over the past year. Net revenues of $2.3 billion beat the consensus estimate by 0.3% but declined 9.7% on a year-over-year basis. Total revenues of $2.64 billion increased 3.8% year over year.
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S&P Global (SPGI) Q3 Earnings Beat Estimates, 2022 View Tepid
S&P Global Inc. (SPGI - Free Report) reported mixed third-quarter 2022 results, wherein earnings beat the Zacks Consensus Estimate but revenues missed the same.
Adjusted earnings per share (excluding $1.09 from non-recurring items) of $2.93 beat the consensus mark by 5% but decreased 17.2% year over year. Revenues of $2.86 billion missed the consensus estimate by 1.6% but improved 37.1% year over year, backed by strength in every segment, except the Ratings division.
Over the past year, shares of S&P Global have lost 33.2% compared with the 20.7% decline of the industry it belongs to.
Image Source: Zacks Investment Research
Let’s check out the numbers in detail.
Segmental Revenues
Ratings revenues decreased 33% year over year to $681 million. Transaction revenues fell 56% year over year to $244 million due to a decrease in debt issuance across all categories. Non-transaction revenues dipped 6% year over year to $437 million due to lower Issuer Credit Rating revenues and an unfavorable foreign exchange.
Market Intelligence adjusted revenues were up 4% year over year to $1.02 billion, primarily driven by strong growth in Credit & Risk Solutions as well as Data & Advisory Solutions.
Commodity Insights revenues increased 70% to $432 million in the third quarter of 2022, primarily driven by the inclusion of IHS Markit, Price Assessments and strong growth in Energy & Resources Data & Insights.
S&P Global Inc. Price, Consensus and EPS Surprise
S&P Global Inc. price-consensus-eps-surprise-chart | S&P Global Inc. Quote
S&P Dow Jones Indices adjusted revenues grew 3% to $334 million, backed by strength across Data & Custom Subscriptions and an exchange-traded derivative activity.
Operating Results
Segment-wise, Ratings’ adjusted operating profit decreased 41% to $381 million, while adjusted operating profit margin decreased 750 bps to 55.9%.
Market Intelligence’s adjusted operating profit increased 13% to $345 million, while adjusted pro forma operating profit margin increased 260 bps to 33.9%.
Commodity Insights adjusted operating profit increased 9% to $198 million, while adjusted operating profit margin increased 190 bps to 45.8%.
S&P Dow Jones’ adjusted operating profit increased 5% to $234 million. Adjusted operating profit margin improved 100 bps to 70.3%.
Balance Sheet and Cash Flow
S&P Global exited third-quarter 2022 with cash, cash equivalents and restricted cash of $1.4 billion compared with $3.6 billion at the end of the prior quarter. Long-term debt was $10.7 billion compared with $10.8 billion reported at the end of second-quarter 2022.
SPGI generated $814 million of cash from operating activities in the reported quarter. Capital expenditures were $21 million. Free cash flow was $722 million.
During the third quarter, S&P Global returned more than $11.7 billion to its shareholders through a combination of $11 billion in the form of an accelerated share repurchase (ASR) agreement and $749 million of cash dividends.
Currently, S&P Global carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
2022 Outlook
Adjusted pro forma revenues are now expected to decline mid-single digits (prior view: decline low-to-mid-single digits).
Adjusted pro forma EPS guidance was updated to $11.00-$11.15 (prior view: $11.35-$11.55). The EPS guidance is below the Zacks Consensus Estimate, which is pegged at $11.37.
Guidance for adjusted pro forma free cash flow (excluding certain items) was also revised to $4 billion (prior view: $4.1-$4.2 billion).
Recent Releases
Omnicom Group Inc. (OMC - Free Report) reported impressive third-quarter 2022 results, wherein both earnings and revenues surpassed the respective Zacks Consensus Estimate.
Earnings of $1.77 per share beat the consensus mark by 7.9% and increased 7.3% year over year, driven by a strong margin performance. Total revenues of $3.4 billion surpassed the consensus estimate by 3% and increased slightly year over year.
Equifax Inc. (EFX - Free Report) reported stellar third-quarter 2022 results, wherein both earnings and revenues surpassed the respective Zacks Consensus Estimate.
Adjusted earnings (excluding 39 cents from non-recurring items) of $1.73 per share beat the Zacks Consensus Estimate by 5.5% but decreased 6.5% on a year-over-year basis. However, revenues of $1.24 billion beat the consensus estimate by 2.3% and improved 1.8% year over year on a reported basis and 4% on a local-currency basis.
The Interpublic Group of Companies, Inc. (IPG - Free Report) reported better-than-expected third-quarter 2022 results.
Adjusted earnings (excluding a penny from non-recurring items) of 63 cents per share beat the Zacks Consensus Estimate by 6.8%. The bottom line has been constant over the past year. Net revenues of $2.3 billion beat the consensus estimate by 0.3% but declined 9.7% on a year-over-year basis. Total revenues of $2.64 billion increased 3.8% year over year.