McGraw Hill Financial, Inc. (MHFI), a leader among rating providers, benchmark providers and analytics, came out with fourth-quarter 2014 results, wherein adjusted earnings from continuing operations of 95 cents a share beat the Zacks Consensus Estimate of 91 cents, and surged 23% from the year-ago quarter.
Management now projects 2015 earnings in the band of $4.35 to $4.45 per share. The current Zacks Consensus Estimate for the full year is $4.34, and could witness an uptrend in the coming days.
However, including legal charges the company reported quarterly loss of $3.71 per share from continuing operations as against earnings of 60 cents in the prior-year period.
Earnings Estimate Revision: The Zacks Consensus Estimate for 2014 has been portraying a downtrend in the last 30 days. However, if we look at McGraw Hill’s performance in 2014, it gives a decent picture. The company had posted positive earnings surprises of 2.3%, 8.2% and 7.4% in the first, second and third quarters of 2014, respectively. In the quarter under review too, the company had surpassed the Zacks Consensus Estimate by 4.4%.
In the trailing four quarters, the company had outperformed the Zacks Consensus Estimate by an average of 5.6%.
Revenues: McGraw Hill generated revenue of $1,290 million that increased 7% year over year and also came ahead of the Zacks Consensus Estimate of $1,280 million. Strong performances across S&P Ratings Services (up 8%), S&P Capital IQ (up 5%), S&P Dow Jones Indices (up 8%) and Commodities & Commercial Markets (up 8%) supported the top-line growth.
Management now expects mid-single-digit revenue growth for 2015.
Key Events: The lawsuit filed by the U.S. Department of Justice (“DOJ”) against McGraw Hill’s subsidiary, Standard & Poor's Financial Services was finally settled. McGraw Hill settled the dispute for an amount of $687.5 million each to the Department of Justice and the Attorneys General of 19 States and the District of Columbia. In addition, the company also settled its dispute with the California Public Employees' Retirement System (CalPERS) for $125 million. McGraw Hill was accused over ratings on three structured investment vehicles by CalPERS.
McGraw Hill also increased its quarterly dividend by 10% to 33 cents a share.
Zacks Rank: Currently, McGraw Hill carries a Zacks Rank #3 (Hold) which is subject to change following the earnings announcement.
Check back later for our full write up on McGraw Hill’s earnings report!
Want the latest recommendations from Zacks Investment Research? Today, you can download
7 Best Stocks for the Next 30 Days. Click to get this free report >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment