S&P Global's Ratings Power Q4 Surge, Capital Returns Sweeten The Deal

S&P Global Inc. SPGI shares are trading higher in the premarket session on Tuesday.

The company reported fourth-quarter adjusted earnings per share of $3.77, beating the street view of $3.48. Quarterly sales of $3.592 billion (+14%) outpaced the analyst consensus estimate of $3.503 billion, driven by growth in all divisions. Revenue from subscription products increased 6%.

The company said it successfully executed its leadership transition, with Martina Cheung assuming the role of President and CEO on November 1, 2024.

“As S&P Global’s new CEO, I have had hundreds of conversations with our customers and partners, who have reinforced the need for our benchmarks, data, and insights to guide their decisions in a constantly evolving market,” Cheung added.

Adjusted operating profit margin increased 260 basis points to 46.7%, primarily due to strength in the Ratings unit.

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The company exited the quarter with cash and equivalents worth $1.66 billion.

Long-term debt as of quarter end totaled $11.394 billion.

S&P Global recently authorized a quarterly cash dividend of $0.96, marking the company’s 52nd consecutive year of dividend increases. Additionally, the Board has authorized the repurchase of shares totaling up to $4.3 billion. The company expects to launch an initial $650 million Accelerated Share Repurchase in the coming weeks.

Outlook: For the full year 2025, S&P Global maintains its target of returning 85% or more of adjusted free cash flow to shareholders through dividends and share repurchases.

The company projects FY25 revenue growth of 5% – 7%, along with adjusted EPS in the range of $17.00 to $17.25. This guidance is above the $16.92 estimate.

S&P Global expects 2025 cash provided by operating activities, less capital expenditures and distributions to noncontrolling interest holders, of ~$5.9 billion. It expects adjusted free cash flow, excluding certain items, of $6 billion.

Price Action: SPGI shares are trading higher by 5.96% to $546.00 premarket at last check Tuesday.

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