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S&P Global (SPGI) Beats on Q1 Earnings & Revenues, Ups View
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S&P Global Inc. (SPGI - Free Report) reported better-than-expected first-quarter 2021 results.
Adjusted earnings per share of $3.39 beat the consensus mark by 8.3% and improved 24.2% year over year on the back of revenue growth across all the segments and productivity programs.
Revenues of $2.02 billion beat the consensus estimate by 2.9% and improved 12.9% year over year.
Considering the pending merger with IHS Markit, shareholders of both companies have approved the transaction, and is expected to complete the deal in the second half of 2021
So far this year, shares of S&P Global have gained 15.7% compared with 6.9% surge of the industry it belongs to and 12.4% rally of the Zacks S&P 500 composite.
Let’s check out the numbers in detail.
Segmental Revenues
Ratings revenues increased 23% year over year to $1.02 billion. Transaction revenues grew 35% to $582 million, owing to substantial levels of high-yield bond issuance, bank loan rating activity and structured finance. Non-transaction revenues improved 10% to $435 million, backed by strength in CRISIL, surveillance, new-entity ratings and Ratings Evaluation Services.
Market Intelligence revenues were up 4% year over year to $539 million, primarily driven by growth in Data Management Solutions, Credit Risk Solutions and Desktop.
Platts revenues rose 5% to $225 million, backed by growth in core subscription business, partially offset by lower Global Trading Services revenues.
S&P Dow Jones Indices revenues grew 4% to $270 million, backed by increased asset-linked fees which were significantly offset by reduced exchange-traded derivative fees.
Operating Results
Adjusted operating profit margin grew 23% year over year to $1.16 billion. Adjusted operating profit margin increased 450 basis points (bps) to 57.6% owing to solid operating results.
Segment wise, Ratings’ adjusted operating profit increased 32% to $686 million and adjusted operating profit margin improved 440 bps to 67.5%.
Market Intelligence’s adjusted operating profit increased 13% to $181 million and adjusted operating profit margin improved 260 bps to 33.5%.
Platts’ adjusted operating profit increased 15% to $131 million and adjusted operating profit margin improved 520 bps to 58.1%.
S&P Dow Jones’ adjusted operating profit increased 5% to $192 million and adjusted operating profit margin improved 70 bps to 71.3%.
S&P Global exited first-quarter 2021 with cash, cash equivalents and restricted cash of $4.52 billion compared with $4.12 billion at the end of the prior quarter. Long-term debt was $4.11 billion, flat sequentially.
The company generated $768 million of cash from operating activities in the reported quarter. Capital expenditures were $18 million. Free cash flow was $681 million.
During the reported quarter, the company returned $186 million to shareholders in the form of dividend payment. However, the company did not repurchase any share during the quarter due to the pending merger with IHS Markit.
2021 Guidance
S&P Global raised its full-year 2021 guidance. The company now expects adjusted EPS in the range of $12.55-$12.75 compared with the prior guidance of $12.25-$12.45. The current Zacks Consensus Estimate of $12.50 lies below the updated guidance.
Free cash flow is anticipated between $3.4 billion and $3.5 billion compared with the prior guidance of $3.3-$3.4 billion.
Revenues are anticipated to grow in mid single-digits.
Equifax’s (EFX - Free Report) first-quarter 2021 adjusted earnings of $1.97 per share beat the Zacks Consensus Estimate by 29.6% and improved on a year-over-year basis. Revenues of $1.21 billion outpaced the consensus estimate by 7.9% and improved 26.6% year over year on a reported basis as well as on a local-currency basis.
Robert Half’s (RHI - Free Report) first-quarter 2021 earnings of 98 cents per share beat the consensus mark by 22.5% and were up 24.1% year over year. Revenues of $1.4 billion surpassed the consensus mark by 3.3% but declined 7.2% year over year on a reported basis and 7.6% on an adjusted basis.
Omnicom’s (OMC - Free Report) first-quarter 2021 adjusted earnings of $1.33 per share beat the consensus mark by 16.7% and increased 11.8% year over year. Total revenues of $3.4 billion surpassed the consensus estimate by 3.6% and increased marginally year over year.
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Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
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S&P Global (SPGI) Beats on Q1 Earnings & Revenues, Ups View
S&P Global Inc. (SPGI - Free Report) reported better-than-expected first-quarter 2021 results.
Adjusted earnings per share of $3.39 beat the consensus mark by 8.3% and improved 24.2% year over year on the back of revenue growth across all the segments and productivity programs.
Revenues of $2.02 billion beat the consensus estimate by 2.9% and improved 12.9% year over year.
Considering the pending merger with IHS Markit, shareholders of both companies have approved the transaction, and is expected to complete the deal in the second half of 2021
So far this year, shares of S&P Global have gained 15.7% compared with 6.9% surge of the industry it belongs to and 12.4% rally of the Zacks S&P 500 composite.
Let’s check out the numbers in detail.
Segmental Revenues
Ratings revenues increased 23% year over year to $1.02 billion. Transaction revenues grew 35% to $582 million, owing to substantial levels of high-yield bond issuance, bank loan rating activity and structured finance. Non-transaction revenues improved 10% to $435 million, backed by strength in CRISIL, surveillance, new-entity ratings and Ratings Evaluation Services.
Market Intelligence revenues were up 4% year over year to $539 million, primarily driven by growth in Data Management Solutions, Credit Risk Solutions and Desktop.
Platts revenues rose 5% to $225 million, backed by growth in core subscription business, partially offset by lower Global Trading Services revenues.
S&P Dow Jones Indices revenues grew 4% to $270 million, backed by increased asset-linked fees which were significantly offset by reduced exchange-traded derivative fees.
Operating Results
Adjusted operating profit margin grew 23% year over year to $1.16 billion. Adjusted operating profit margin increased 450 basis points (bps) to 57.6% owing to solid operating results.
Segment wise, Ratings’ adjusted operating profit increased 32% to $686 million and adjusted operating profit margin improved 440 bps to 67.5%.
Market Intelligence’s adjusted operating profit increased 13% to $181 million and adjusted operating profit margin improved 260 bps to 33.5%.
Platts’ adjusted operating profit increased 15% to $131 million and adjusted operating profit margin improved 520 bps to 58.1%.
S&P Dow Jones’ adjusted operating profit increased 5% to $192 million and adjusted operating profit margin improved 70 bps to 71.3%.
S&P Global Inc. Price, Consensus and EPS Surprise
S&P Global Inc. price-consensus-eps-surprise-chart | S&P Global Inc. Quote
Balance Sheet and Cash Flow
S&P Global exited first-quarter 2021 with cash, cash equivalents and restricted cash of $4.52 billion compared with $4.12 billion at the end of the prior quarter. Long-term debt was $4.11 billion, flat sequentially.
The company generated $768 million of cash from operating activities in the reported quarter. Capital expenditures were $18 million. Free cash flow was $681 million.
During the reported quarter, the company returned $186 million to shareholders in the form of dividend payment. However, the company did not repurchase any share during the quarter due to the pending merger with IHS Markit.
2021 Guidance
S&P Global raised its full-year 2021 guidance. The company now expects adjusted EPS in the range of $12.55-$12.75 compared with the prior guidance of $12.25-$12.45. The current Zacks Consensus Estimate of $12.50 lies below the updated guidance.
Free cash flow is anticipated between $3.4 billion and $3.5 billion compared with the prior guidance of $3.3-$3.4 billion.
Revenues are anticipated to grow in mid single-digits.
Currently, S&P Global carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Business Services Companies
Equifax’s (EFX - Free Report) first-quarter 2021 adjusted earnings of $1.97 per share beat the Zacks Consensus Estimate by 29.6% and improved on a year-over-year basis. Revenues of $1.21 billion outpaced the consensus estimate by 7.9% and improved 26.6% year over year on a reported basis as well as on a local-currency basis.
Robert Half’s (RHI - Free Report) first-quarter 2021 earnings of 98 cents per share beat the consensus mark by 22.5% and were up 24.1% year over year. Revenues of $1.4 billion surpassed the consensus mark by 3.3% but declined 7.2% year over year on a reported basis and 7.6% on an adjusted basis.
Omnicom’s (OMC - Free Report) first-quarter 2021 adjusted earnings of $1.33 per share beat the consensus mark by 16.7% and increased 11.8% year over year. Total revenues of $3.4 billion surpassed the consensus estimate by 3.6% and increased marginally year over year.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
See the 5 high-tech stocks now>>