Moody's MCO reported fourth-quarter 2024 adjusted earnings of $2.62 per share, which outpaced the Zacks Consensus Estimate of $2.60. The bottom line jumped 20% from the year-ago quarter figure.

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Shares of MCO rallied more than 2.5% in pre-market trading, driven by its better-than-expected earnings performance and solid 2025 guidance. 

Robust global bond issuance volumes and steady demand for analytics supported Moody’s results. The company’s liquidity position was strong during the quarter. However, an increase in operating expenses posed a headwind.

After considering certain non-recurring items, net income attributable to Moody's was $395 million or $2.17 per share, up from $340 million or $1.85 per share in the prior-year quarter.

For 2024, adjusted earnings of $12.47 per share beat the consensus estimate of $12.39 and grew 26% year over year. Net income attributable to Moody's (GAAP) was $2.06 billion or $11.26 per share, up from $1.61 billion or $8.73 per share in 2023.

MCO’s Revenues Up, Costs Rise

Quarterly revenues were $1.67 billion, which lagged the Zacks Consensus Estimate of $1.70 billion. However, the top line rose 13% year over year.

For 2024, revenues were up 20% to $7.09 billion. The top line missed the consensus estimate of $7.11 billion.

Total expenses were $1.11 billion, up 13% year over year.

Adjusted operating income of $733 million rose 16%. Adjusted operating margin was 43.8%, rising from 42.6% a year ago.

Moody's Segment Quarterly Performance Solid

Moody’s Investors Service revenues increased 18% year over year to $809 million. The rise was driven by solid Corporate Finance and improvement in Structured Finance revenues.

Moody’s Analytics revenues grew 8% to $863 million. Robust demand for Moody’s proprietary data and unique analytical insights contributed to this rise.

MCO’s Balance Sheet Strong

As of Dec. 31, 2024, Moody’s had total cash, cash equivalents and short-term investments of $2.97 billion, up from $2.19 billion as of Dec. 31, 2023.

The company had $6.73 billion in outstanding debt and $1.25 billion in additional borrowing capacity under the revolving credit facility.

Update on MCO Share Repurchases

During the quarter, Moody's repurchased 1 million shares at an average price of $477.15.

As of Dec. 31, 2024, approximately $1.6 billion of share repurchase authorization remained available.

Moody’s 2025 Guidance

Driven by impressive 2024 performance, Moody’s expects adjusted earnings to be in the range of $14.00-$14.50 per share. On a GAAP basis, earnings are projected to be within $12.75-$13.25 per share. 

Moody’s projects revenues to increase in the high-single-digit percent range.

Operating expenses are expected to rise in the low-to-mid-single-digit percent range. Further, the company projects $80 million to $100 million in restructuring charges related to the Strategic and Operational Efficiency Restructuring Program.

Our Take on Moody’s Stock

Moody’s remains well-positioned for growth on the back of a solid market position, strength in diverse operations and strategic acquisitions. However, elevated operating expenses and geopolitical and macroeconomic concerns are likely to hurt its financials.
 

Moody's Corporation Stock Price, Consensus and EPS Surprise

Moody's Corporation price-consensus-eps-surprise-chart | Moody's Corporation Quote

Currently, Moody’s carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Finance Stocks

The Carlyle Group Inc. CG reported fourth-quarter 2024 post-tax distributable earnings per share of 92 cents, which missed the Zacks Consensus Estimate by 8%. The figure compared favorably with earnings of 86 cents per share in the year-ago quarter.

CG’s results were hurt by an increase in expenses. However, an increase in segment fee revenues and a rise in assets under management (AUM) balance offered support. 

Ares Capital Corporation’s ARCC fourth-quarter 2024 core earnings of 55 cents per share missed the Zacks Consensus Estimate of 58 cents. The bottom line reflects a decline of 12.7% from the prior-year quarter.

The results were primarily affected by an increase in expenses. Nonetheless, an improvement in the total investment income and the company’s robust portfolio activities supported ARCC’s results to some extent.

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