Moody's (MCO -0.23%) easily surpassed earnings estimates in the first quarter, generating double-digit percentage gains in profits, but lowered its guidance for 2020.
The credit ratings, research, and analytics firm saw revenue increase 13% to $1.3 billion compared to the first quarter of 2019. Net income was up 30.8% year over year to $488 million, while diluted earnings per share (EPS) climbed 32.6% to $2.57. EPS beat consensus estimates by about 18%.
Moody's Investor Services -- the credit rating business -- accounted for $794 million in revenue in the quarter, an increase of 18% over the first quarter of 2019. Moody's Analytics saw revenue rise 5% to $496 million. Expenses were $698 million, up from $680 million a year ago.
The company approved a quarterly dividend of $0.56 per share, the same as the previous quarter.
Moody's revised its guidance for 2020 to account for several factors, including the impact of COVID-19; response to the pandemic by governments, businesses, and individuals; disruptions to the energy markets; and interest rates. The revised 2020 guidance for revenue is a decline in the mid-single-digit range, down from a previously projected increase in the mid-single-digit range. Diluted EPS was revised to be in the $7.25 to $7.85 range for the year, down from the previous range of $8.60 to 8.80. In 2019, EPS for the financial stock was $7.42.
"While we had resilient first quarter performance with impressive growth in both revenue and margins, we expect the economic implications of COVID-19 to be more pronounced through the second half of the year," President and CEO Raymond McDaniel said. "Consequently, while we believe that Moody's position and the long-term fundamentals of our business remain strong, we have both lowered and widened our full year 2020 adjusted diluted EPS guidance range to reflect this higher degree of uncertainty."