• 4Q16 revenue up 9% to $942.1 million; FY 2016 revenue up 3% to $3.6 billion
  • 4Q16 net loss of $428.6 million and adjusted net income of $237.3 million; FY 2016 net income of $266.6 million and adjusted net income of $940.6 million
  • 4Q16 loss per share of $2.22, a $3.31 decrease from 4Q15 EPS; adjusted EPS up 13% to $1.23
  • FY 2016 EPS of $1.36 down 71%; adjusted EPS up 5% to $4.81
  • Expect FY 2017 EPS of $5.15 to $5.30, which includes an estimated $0.15 benefit from an accounting change related to equity compensation

“2016 was notable for the variety of events affecting global financial markets,” said Raymond McDaniel, President and Chief Executive Officer of Moody’s. “Against volatile market conditions, Moody’s demonstrated solid financial performance, achieving revenue of $3.6 billion, up three percent from 2015. Recognizing ongoing uncertain macroeconomic and geopolitical conditions, for 2017 we are projecting mid-single-digit percent revenue growth and EPS in the range of $5.15 to $5.30, which includes an estimated $0.15 benefit from an accounting change related to equity compensation.”

FOURTH QUARTER 2016 HIGHLIGHTS

Moody’s Corporation reported revenue of $942.1 million for the three months ended December 31, 2016, up 9% from $865.9 million for the same period in 2015.

Operating expense totaled $1.4 billion compared to $532.8 million for the same period in 2015. Operating expense for the fourth quarter of 2016 includes an $863.8 million settlement charge related to an agreement announced on January 13, 2017 that the Company reached with the U.S. Department of Justice and the attorneys general of 21 U.S. states and the District of Columbia.

Moody’s operating loss was $473.1 million compared to operating income of $333.1 million in the prior-year period, resulting in a negative operating margin for the quarter. Adjusted operating income (operating income before the settlement charge, as well as depreciation and amortization) was $423.6 million, up 17% from the prior-year period, resulting in an adjusted operating margin of 45.0%.

The Company recorded a net loss of $428.6 million in the fourth quarter of 2016, down from net income of $217.9 million in the prior-year period. Adjusted net income (net income before the settlement charge, net of tax, and a non-cash foreign exchange benefit related to a subsidiary liquidation) was $237.3 million, up 9% from the prior-year period.

Fourth quarter 2016 loss per share was $2.22, which includes a $3.63 loss from the settlement charge and an $0.18 gain from the non-cash foreign exchange benefit, compared to earnings per share of $1.09 in the prior-year period. Excluding these items, adjusted fourth quarter earnings per share was $1.23, up 13% from $1.09 in the prior-year period.

FULL YEAR 2016 HIGHLIGHTS

Moody’s Corporation reported revenue of $3.6 billion for the year ended December 31, 2016, up 3% from $3.5 billion in 2015.

Operating expense totaled $3.0 billion compared to $2.0 billion in 2015. Full year 2016 operating income was $638.7 million, down 57% from the prior year, resulting in an operating margin of 17.7%, down from 42.3% in the prior year. Adjusted operating income (operating income before the settlement charge, a $12.0 million restructuring charge associated with cost management initiatives, and depreciation and amortization) of $1.6 billion increased 3% from the prior year. Moody’s adjusted operating margin was 45.5%, consistent with the prior year.

The Company recorded net income of $266.6 million in 2016, down from $941.3 million in the prior year. Adjusted net income (net income before the settlement and restructuring charges, net of tax, and the non-cash foreign exchange benefit related to a subsidiary liquidation) of $940.6 million was up from $934.9 million in 2015.

Full year 2016 EPS was $1.36 compared to $4.63 in the prior year. Excluding the settlement and restructuring charges and the foreign exchange gain in 2016, as well as a benefit from a legacy tax matter in 2015, adjusted EPS was $4.81, up 5% from $4.60 in 2015.

Source: Moody’s Earnings Release