Moody's (MCO 0.46%) delivered robust first-quarter results on May 2. The global credit ratings and risk analysis powerhouse posted adjusted diluted earnings per share (EPS) of $3.37, surpassing analysts' expectations by nearly 12%, and reported revenue of $1.79 billion, a 21.5% increase from the previous year and ahead of estimates.
| Metric | Q1 2024 | Q1 2024 Analyst Estimate | Q1 2023 | % Change |
|---|---|---|---|---|
| Revenue | $1.79 billion | $1.7 billion | $1.47 billion | 21.5% |
| Adjusted EPS | $3.37 | $3.01 | $2.99 | 12.7% |
| Moody's Investors Service revenue | $987 million | N/A | $733 million | 34.7% |
| Moody's Analytics revenue | $799 million | N/A | $737 million | 8.4% |
Data sources: Company results from company. Analyst estimates from FactSet.
Moody's in focus
Though most investors will likely think of Moody's first as a credit ratings business, it does far more than that. It is a comprehensive analytics company that delves into risk assessment across various sectors, leveraging its broad data capabilities to serve diverse client needs. The Moody's Analytics segment enjoys steady demand for its Know Your Customer solutions and data analytics, underpinned by technological advancements including AI integration. Its Investors Service continues to benefit from favorable market conditions, allowing it to produce impressive revenue growth, particularly from corporate finance and structured finance.
First-quarter highlights
The quarter was marked by a notable uplift in Investors Service segment revenue, propelled by strong market conditions that boosted issuance activity across multiple asset classes. Moody's Analytics, meanwhile, saw demand surge for its Know Your Customer and data analytics solutions. The financial landscape's evolution points to a promising year ahead for the company.
Moody's adept cost management strategies, paired with its knack for capturing flourishing market demand, were brightly highlighted in this quarter's results. Additionally, its commitment to shareholder returns, demonstrated through dividends and share repurchases, speaks volumes about its financial health and management's optimistic outlook.
Looking ahead
Moody's sharpened its 2024 EPS guidance to a range of $10.40 to $11 from the prior range of $10.25 to $11. Investors should keep a keen eye on its efforts to harness AI and other technological advancements, which could become significant growth drivers if successful.
