Moody's Q3 2020 Earnings Report
Key Takeaways
Moody's Corporation reported a revenue of $1.4 billion for Q3 2020, a 9% increase compared to Q3 2019. Diluted EPS increased by 24% to $2.47, while adjusted diluted EPS increased by 25% to $2.69. The company raised its full year 2020 adjusted diluted EPS guidance range to $9.95 to $10.15.
Moody's Corporation's Q3 2020 revenue reached $1.4 billion, reflecting a 9% increase year-over-year.
Moody's Investors Service (MIS) reported revenue of $825 million, up 11% from Q3 2019.
Moody's Analytics (MA) reported revenue of $531 million, up 7% from Q3 2019.
Diluted EPS for Q3 2020 was $2.47, a 24% increase from Q3 2019, while adjusted diluted EPS was $2.69, a 25% increase.
Moody's
Moody's
Moody's Revenue by Segment
Moody's Revenue by Geographic Location
Forward Guidance
Moody's updated outlook for 2020 reflects numerous assumptions about factors that could affect its business, including the impact of COVID-19, government and regulatory responses, and economic conditions. Full year 2020 diluted EPS is expected to be $9.30 to $9.50 and adjusted diluted EPS is expected to be $9.95 to $10.15.
Positive Outlook
- Revenue increase in the high-single-digit percent range.
- Operating expenses increase in the low-single-digit percent range.
- Operating margin approximately 45%.
- Adjusted operating margin approximately 50%.
- MIS global revenue increase in the low-double-digit percent range.
Challenges Ahead
- Approximately 6% and 9% declines in 2020 U.S. and Euro area GDPs, respectively.
- U.S. high yield interest rate spreads of approximately 500 bps.
- U.S. unemployment of approximately 8%.
- Global high yield default rate rising to approximately 8% by the end of 2020.
- The duration and severity of the COVID-19 crisis are unknown.
Revenue & Expenses
Visualization of income flow from segment revenue to net income