Revenue Increased 9%
Diluted EPS Increased 266% to $3.36 Due to Gain on Sale of J.D. Power
Adjusted Diluted EPS Increased 17% to $1.43
Operating Margin Increased 6,270 Basis Points to 93.7% Due to Gain on Sale of J.D. Power
Adjusted Operating Margin Increased 320 Basis Points to 44.4%
S&P Global (NYSE: SPGI) today reported third quarter 2016 results with revenue of $1.44 billion, an increase of 9% compared to the same period last year. Net income and diluted earnings per share were $892 million and $3.36, respectively which included a pre-tax gain of $722 million from the sale of J.D. Power.
Adjusted net income increased 13% to $381 million and adjusted diluted earnings per share increased 17% to $1.43. The adjustments in the third quarter of 2016 were primarily related to the gain on the sale of J.D. Power and net insurance recoveries related to legal settlements, partially offset by deal-related amortization and divestiture transaction costs.
“We have made substantial refinements to our portfolio as we completed the sale of J.D. Power, two pricing businesses, and an equity research business while adding PIRA Energy Group to S&P Global Platts and Trucost to S&P Dow Jones Indices. It is a testament to the strength of our business and the operating model that we have been able to successfully manage significant acquisitions and divestitures while continuing to deliver on our growth and performance objectives,” said Douglas L. Peterson, President and Chief Executive Officer of S&P Global. “Our strong revenue growth, successful productivity initiatives, and meaningful share repurchases combined to deliver third quarter adjusted EPS growth of 17%; a noteworthy result in this economic environment.”
Outlook: The Company provides guidance on a non-GAAP basis as the Company cannot predict certain elements which are included in reported GAAP results. We are unable to reconcile our full-year adjusted diluted EPS guidance to comparable GAAP guidance without unreasonable effort because management cannot reliably predict the necessary components of our full-year 2016 net income, including the impact and timing of potential dispositions and other structural changes or their probable significance. The impact of such adjustments could be significant.
Adjusted diluted EPS guidance is increased to a range of $5.15 to $5.25 to reflect strong results year-to-date and the expectation that debt issuance remains strong for the remainder of the year.