The 10-second takeaway
For the quarter ended March 31 (Q1), Moody's beat expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue increased. Non-GAAP earnings per share grew significantly. GAAP earnings per share expanded.
Gross margins expanded, operating margins contracted, net margins dropped.
Moody's logged revenue of $731.8 million. The seven analysts polled by S&P Capital IQ anticipated revenue of $717.3 million on the same basis. GAAP reported sales were 13% higher than the prior-year quarter's $646.8 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 $0.97. The nine earnings estimates compiled by S&P Capital IQ forecast $0.85 per share. Non-GAAP EPS of $0.97 for Q1 were 28% higher than the prior-year quarter's $0.76 per share. GAAP EPS of $0.83 for Q1 were 9.2% higher than the prior-year quarter's $0.76 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 72.6%, 130 basis points better than the prior-year quarter. Operating margin was 38.3%, 330 basis points worse than the prior-year quarter. Net margin was 25.7%, 110 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $713.3 million. On the bottom line, the average EPS estimate is $0.87.
Next year's average estimate for revenue is $2.93 billion. The average EPS estimate is $3.44.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 850 members out of 1,001 rating the stock outperform, and 151 members rating it underperform. Among 358 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 313 give Moody's a green thumbs-up, and 45 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 $51.50.
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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.