Moody's Corp. (MCO) Misses Q4 EPS by 2c, Offers FY Guidance

Moody's Corp. (NYSE: MCO) reported Q4 EPS of $1.91, $0.02 worse than the analyst estimate of $1.93. Revenue for the quarter came in at $1.3 billion versus the consensus estimate of $1.22 billion.

GUIDANCE:

Moody's Corp. sees FY2021 EPS of $10.30-$10.70, versus the consensus of $10.36.

• Moody’s updated outlook for 2021 reflects numerous assumptions about many factors that could affect its business based on information reviewed by management through and as of today’s date, including observations and assumptions regarding the impact of COVID-19, the responses to the pandemic by governments, regulators, businesses and individuals, as well as the effects on interest rates, foreign currency exchange rates, capital markets’ liquidity and activity in different sectors of the debt markets. The outlook also reflects assumptions about both general economic conditions and GDP growth in the U.S. and Euro area, and the company’s own operations and personnel. The outlook as of February 12, 2021 incorporates numerous macroeconomic assumptions including: (a) full year 2021 U.S. and Euro area GDPs expanding approximately 4% - 5% and 3.5% - 4.5%, respectively; (b) U.S. high yield interest rate spreads below an average of approximately 450 bps; (c) U.S. unemployment to decline to approximately 5% - 6%; and (d) the global high yield default rate falling below 5% by the end of 2021.
• Moody's ratings revenue guidance assumes MIS's full year global rated issuance decreases in the high-single-digit percent range.
• While the duration and severity of the COVID-19 crisis are unknown, the company has operated effectively to date and Moody’s outlook assumes that the company continues to not experience any material negative impact on its ability to conduct its operations as a result of COVID-19. The implications of COVID-19 or other situations or developments could affect these and many other factors that also could cause actual results to differ materially from Moody’s outlook.
• These assumptions are subject to uncertainty, and actual full year results for 2021 could differ materially from Moody’s current outlook. In addition, Moody’s guidance assumes foreign currency translation at end-of-quarter exchange rates. Specifically, our forecast reflects exchange rates for the British pound (£) of $1.37 to £1 and for the euro (€) of $1.22 to €1.
• Full year 2021 guidance includes share repurchases of approximately $1.5 billion, subject to available cash, market conditions and other ongoing capital allocation decisions.
• Full year 2021 diluted EPS is expected to be $9.70 to $10.10. The company expects full year 2021 adjusted diluted EPS to be $10.30 to $10.70.
• A full summary of Moody's guidance as of February 12, 2021, is included in Table 12 - 2021 Outlook table at the end of this press release.

For earnings history and earnings-related data on Moody's Corp. (MCO) click here.

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