Moody's (MCO Quick QuoteMCO - Free Report) reported third-quarter 2024 adjusted earnings of $3.21 per share, which handily outpaced the Zacks Consensus Estimate of $2.89. The bottom line surged 32% from the year-ago quarter figure.

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Robust global bond issuance volumes and steady demand for analytics supported Moody’s results. The company’s liquidity position was robust during the quarter. However, an increase in operating expenses posed a headwind.

After considering certain non-recurring items, net income attributable to Moody's was $534 million or $2.93 per share, up from $389 million or $2.11 per share in the prior-year quarter.

MCO’s Revenues Up, Costs Rise

Quarterly revenues were $1.81 billion, which beat the Zacks Consensus Estimate of $1.73 billion. Also, the top line jumped 23% year over year.

Total expenses were $1.08 billion, up 15% year over year.

Adjusted operating income of $867 million soared 32%. Adjusted operating margin was 47.8%, rising from 44.6% a year ago.

Moody's Segment Performance Solid

Moody’s Investors Service revenues surged 41% year over year to $982 million. The rise was driven by solid Corporate Finance and improvement in Structured Finance revenues.

Moody’s Analytics revenues increased 7% to $831 million. Robust demand for Moody’s proprietary data and unique analytical insights contributed to this rise.

MCO’s Balance Sheet Strong

As of Sept. 30, 2024, Moody’s had total cash, cash equivalents and short-term investments of $3.22 billion, up from $2.19 billion as of Dec 31, 2023.

The company had $6.88 billion in outstanding debt and $1.25 billion in additional borrowing capacity under the revolving credit facility.

Update on MCO’s Share Repurchases

During the quarter, Moody's repurchased 0.9 million shares at an average price of $464.77.

Moody’s 2024 Guidance

Driven by impressive third-quarter performance, Moody’s now expects adjusted earnings to be in the range of $11.90-$12.10 per share, higher than the previous guidance of $11.00-$11.40.

On a GAAP basis, earnings are now projected to be within $10.85-$11.05 per share. Earlier, management expected GAAP earnings to be between $9.95 and $10.35.

Moody’s now projects revenues to increase in the high-teens percent range, higher than the prior target of the low-teens percent.

Operating expenses are expected to rise roughly 10%, a change from the high-single-digit percent range.

Our Take on Moody’s

Moody’s remains well-positioned for growth on the back of a solid market position, strength in diverse operations and strategic acquisitions. However, elevated operating expenses and geopolitical and macroeconomic concerns are likely to hurt its financials.
 

Moody's Corporation Price, Consensus and EPS Surprise

Moody's Corporation price-consensus-eps-surprise-chart | Moody's Corporation Quote

Currently, Moody’s carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Earnings Dates & Expectations of Other Finance Stocks

LPL Financial (LPLA Quick QuoteLPLA - Free Report) is slated to announce third-quarter 2024 numbers on Oct. 30.

Over the past seven days, the Zacks Consensus Estimate for LPL Financial’s quarterly earnings has moved almost 1% lower to $3.69, implying a 1.3% decrease from the prior-year reported number.

Ares Capital Corporation (ARCC Quick QuoteARCC - Free Report) is also scheduled to announce quarterly numbers on Oct. 30.

Over the past week, the Zacks Consensus Estimate for Ares Capital’s quarterly earnings has been unchanged at 59 cents. The estimate suggests no change from the prior-year reported number.