Moody's MCO reported first-quarter 2026 adjusted earnings of $4.33 per share, which outpaced the Zacks Consensus Estimate of $4.25. The bottom line grew 13% from the year-ago quarter.
Shares of MCO gained 1.6% in pre-market trading on better-than-expected quarterly performance.
The results primarily benefited from an improvement in revenues. Steady demand for analytics and the robust performance of the Moody’s Investors Service segment supported the results. The company’s liquidity position was strong in the quarter. An increase in operating expenses posed a headwind.
After considering certain non-recurring items, net income attributable to Moody's was $661 million, or $3.73 per share, up from $625 million, or $3.46 per share, in the prior-year quarter.
MCO’s Revenues Improve, Costs Rise
Quarterly revenues were $2.08 billion, which surpassed the Zacks Consensus Estimate of $2.07 billion. The top line rose 8% year over year.
Total expenses were $1.16 billion, up 7% year over year.
Adjusted operating income of $1.1 billion rose 11% year over year. The adjusted operating margin was 53.2%, up from 51.7% a year ago.
Moody's Strong Quarterly Segment Performance
Moody’s Investors Service revenues increased 8% year over year to $1.15 billion. The rise was driven by strength in Corporate Finance, Financial Institutions, and Public, Project and Infrastructure Finance revenues, partially offset by lower revenues at Structured Finance.
Moody’s Analytics revenues rose 8% year over year to $928 million. The increase was driven by 7% growth in Decision Solutions, an 8% rise in Research and Insights, and a 10% jump in Data & Information.
MCO’s Solid Balance Sheet
As of March 31, 2026, Moody’s had total cash, cash equivalents and short-term investments of $1.51 billion, down from $2.45 billion as of Dec. 31, 2025.
The company had $6.39 billion in outstanding long-term debt.
Moody's Share Repurchase Update
In the quarter, MCO repurchased 1.5 million shares.
MCO’s 2026 Guidance Affirmed
Moody’s expects adjusted earnings in the range of $16.40-$17.00 per share.
Moody’s projects revenues to increase in the high-single-digit percent range.
Operating expenses are expected to be in the mid-single-digit range.
Our Take on MCO
Moody’s remains well-positioned for growth, driven by a solid market position, strength in diverse operations and strategic acquisitions. Elevated operating expenses, and geopolitical and macroeconomic concerns are likely to hurt its financials.
Moody's Corporation Price, Consensus and EPS Surprise
Moody's Corporation price-consensus-eps-surprise-chart | Moody's Corporation Quote
Currently, Moody’s carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance & Expectations of MCO’s Peers
Accenture plc ACN reported impressive second-quarter fiscal 2026 results, wherein earnings and revenues surpassed the Zacks Consensus Estimates.
ACN’s earnings were $2.93 per share, beating the Zacks Consensus Estimate by 2.5%. The metric increased 3.9% from the year-ago quarter. Total revenues of $18 billion beat the consensus estimate by 1.2% and rose 8.3% on a year-over-year basis.
S&P Global Inc. SPGI is scheduled to report first-quarter 2026 results on April 28.
Over the past seven days, the Zacks Consensus Estimate for S&P Global’s quarterly earnings has been revised lower to $4.82. The estimated figure indicates 10.3% growth from the prior-year quarter.
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
