S&P Global (NYSE: SPGI) has reported third quarter 2021 results with revenue of $2,087 million, an increase of 13% compared to the same period last year, with every segment delivering revenue growth.  Net income increased 75% to $797 million and diluted earnings per share increased 75% to $3.30 primarily due to the debt tender premium and fees associated with the senior notes tender offer in the prior period. 

Segment Results:

S&P Dow Jones Indices:  S&P Dow Jones Indices LLC is a majority-owned subsidiary.  The consolidated results are included in S&P Global’s income statement and the portion related to the 27% noncontrolling interest is removed in net income attributable to noncontrolling interests.

Revenue increased 28% to $298 million in the third quarter of 2021 with strong growth in asset-linked fees and exchange-traded derivative activity.

Asset-linked fees include fees associated with ETFs, mutual funds, and certain over-the-counter derivatives.  Revenue from ETFs is the largest component of asset-linked fees, and average ETF AUM associated with the Company’s indices increased 48% year-over-year.  Quarter-ending ETF AUM associated with our indices was $2.5 trillion, a 43% increase from the end of the third quarter of 2020.

Operating profit increased 41% to $213 million.  Operating profit margin increased 670 basis points to 71.3% due to substantial revenue growth and increased legal-related costs in the prior period.  Adjusted operating profit increased 40% to $214 million.  Adjusted operating profit margin increased 660 basis points to 71.8%.  Operating profit attributable to the Company increased 41% to $155 million.  Adjusted operating profit attributable to the Company increased 40% to $156 million.

Ratings:  Revenue increased 14% to $1,017 million in the third quarter of 2021.  Transaction revenue increased 13% to $551 million as gains in bank loan rating activity and structured finance more than offset declines in corporate bond issuance.  Non-transaction revenue increased 15% to $466 million due to fees associated with surveillance, new-entity ratings, and Rating Evaluation Service activity.

Operating profit increased 18% to $644 million.  Operating profit margin increased 240 basis points to 63.3% compared to the third quarter of 2020 as revenue growth outpaced expense growth.  Adjusted operating profit increased 17% to $645 million and adjusted operating profit margin increased 160 basis points to 63.4%.

Market Intelligence:  Revenue increased 7% to $570 million in the third quarter of 2021 with growth in Desktop, Credit Risk Solutions, and Data Management Solutions.  Operating profit increased 14% to $187 million and operating profit margin improved 200 basis points to 32.8% as new product launches added to revenue growth.  Adjusted operating profit increased 13% to $203 million and adjusted operating profit margin improved 190 basis points to 35.7%.

Platts:  Revenue increased 8% to $239 million in the third quarter of 2021 with growth in the core subscription business augmented by growth in Global Trading Services.  Operating profit increased 6% to $128 million and operating profit margin decreased 100 basis points to 53.7% primarily due to increased investment in growth initiatives.  Adjusted operating profit increased 5% to $130 million and adjusted operating profit margin decreased 110 basis points to 54.6%.

Corporate Unallocated Expense:  This expense increased from $36 million in the prior period to $89 million in the third quarter of 2021 primarily due to $54 million of expenses related to the pending IHS Markit merger.  Adjusted Corporate Unallocated expense increased from $32 million in the prior period to $37 million primarily due to Company-owned life insurance proceeds in the prior period.

Outlook:  Because the Company now anticipates the closing of the merger with IHS Markit in 2022, we are able to provide 2021 GAAP guidance for the first time.  2021 reported revenue is expected to increase low double-digits.  GAAP EPS guidance is expected to be in a range of $12.50 to $12.65.

Investor Relations: http://investor.spglobal.com

Source:  S&P Earnings Release