S&P Global Inc (SPGI) delivered strong financial results for the recent quarter, exceeding both analysts’ earnings and revenue expectations. The company reported adjusted earnings per share (EPS) of $3.89, beating the consensus estimate of $3.64 and marking a 21% year-over-year increase. Revenue for the quarter reached $3.575 billion, surpassing the estimated $3.431 billion and reflecting a 16% growth year-on-year. This growth was fueled by robust performance across all of S&P Global’s divisions.
Despite the positive financial performance, the stock price took a downturn after the results were announced. This decline might be attributed to various factors, including investor sentiment and market conditions.
The company’s adjusted operating profit margin saw a significant improvement, expanding by 180 basis points to 48.8%. This growth was mainly driven by the strong performance of its Ratings and Indices divisions. Additionally, S&P Global generated a substantial $1.33 billion in free cash flow during the quarter.
In terms of shareholder returns, S&P Global outlined its plans to return approximately 85% of its adjusted free cash flow to shareholders through dividends and share repurchases for the entire year 2024. The company’s board approved a quarterly cash dividend of $0.91. Moreover, S&P Global expects to execute additional accelerated share repurchases (ASR) worth $1.3 billion in the coming weeks.
Looking ahead, S&P Global has raised its full-year revenue outlook for 2024 to 11.5% – 12.5% or $13.934 billion – $14.059 billion, compared to the previous forecast of 8.0% – 10.0% or $13.497 billion – $13.747 billion. This revised outlook surpasses the analyst consensus estimate of $13.79 billion. The company also projects full-year adjusted EPS to be between $15.10 and $15.30, up from the earlier range of $14.35 – $14.60, and exceeding the consensus estimate of $14.86.
In leadership changes, S&P Global President of S&P Global Ratings, Martina L. Cheung, will assume the role of CEO effective November 1, 2024, succeeding Douglas Peterson. Eric Aboaf will join the company as CFO starting February 2025, replacing interim finance chief Christopher Craig, as previously announced.
The stock’s recent performance reflects the complex interplay of positive financial performance and market dynamics. Investors will likely continue to monitor the company’s future developments and its strategic initiatives, as well as the broader economic landscape, to gauge the potential for future stock price growth.