The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Moody's beat expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue grew significantly and GAAP earnings per share increased significantly.
Margins grew across the board.
Moody's reported revenue of $754.2 million. The seven analysts polled by S&P Capital IQ predicted revenue of $683.3 million on the same basis. GAAP reported sales were 33% higher than the prior-year quarter's $567.1 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.75. The eight earnings estimates compiled by S&P Capital IQ forecast $0.69 per share. GAAP EPS of $0.70 for Q4 were 63% higher than the prior-year quarter's $0.43 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 70.6%, 260 basis points better than the prior-year quarter. Operating margin was 36.1%, 440 basis points better than the prior-year quarter. Net margin was 21.2%, 420 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $690.1 million. On the bottom line, the average EPS estimate is $0.77.
Next year's average estimate for revenue is $2.83 billion. The average EPS estimate is $3.15.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 861 members out of 1,013 rating the stock outperform, and 152 members rating it underperform. Among 384 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 331 give Moody's a green thumbs-up, and 53 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Moody's is hold, with an average price target of $49.00.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool recommends Moody's. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.