McGraw Hill Financial (MHFI) Tops Q4 EPS by 2c; Pursuing J.D. Power Sale; Will Rebrand as 'S&P Global'

McGraw Hill Financial (NYSE: MHFI) reported Q4 EPS of $1.04, $0.02 better than the analyst estimate of $1.02. Revenue for the quarter came in at $1.37 billion versus the consensus estimate of $1.38 billion.

GUIDANCE:

McGraw Hill Financial sees FY2016 EPS of $5.00-$5.15, versus the consensus of $4.88.

Outlook and Changes to Performance Metric: The integration of SNL is progressing well with additional cost synergies identified. With plans in place and work teams underway, the Company now anticipates approximately $100 million of synergies. Approximately 70% of the synergies are cost related and the Company expects meaningful realization beginning in 2016.

Beginning in 2016, the Company will change its non-GAAP reporting by adjusting for deal-related amortization. This change is intended to better reflect the underlying economic performance of the business and is consistent with how management views financial results. 2016 amortization expense is expected to be $98 million. Reflecting this change, the Company is introducing 2016 guidance of mid-to-high single-digit revenue growth and adjusted diluted EPS of $5.00 to $5.15.

The Company initiated an active program to sell J.D. Power and has received considerable interest from third parties. The Company believes that a sale is probable in the next year and the assets and liabilities of J.D. Power have been reclassified as held for sale in our consolidated balance sheet as of December 31, 2015.

Pending shareholder approval, the Company will be re-branded "S&P Global". This name leverages the Company's rich heritage and its powerful financial data and analytics brands, while signaling a strong global footprint and broad portfolio. The change will be effective pending a shareholder vote on April 27, 2016.

For earnings history and earnings-related data on McGraw Hill Financial (MHFI) click here.

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