Moody's shares fell 3.0% in premarket trading on October 21, 2026, after third-quarter adjusted earnings and revenue missed analyst expectations. The credit ratings and analytics company nevertheless reaffirmed its full-year 2026 adjusted earnings guidance of $16.50 to $17.00 per share.
Key Takeaways
- Adjusted earnings of $4.14 per share fell short of the $4.25 analyst forecast.
- Analytics revenue growth offset a decline in the ratings business, leaving total revenue up 1%.
- Moody's maintained its full-year profit outlook despite the quarterly shortfall.
Table of Contents
- Moody's shares decline despite year-over-year earnings growth
- Analytics growth offsets weaker ratings revenue
- Full-year outlook stays intact
- Conclusion
Moody's shares decline despite year-over-year earnings growth
For the three months ended September 30, revenue totaled $2.023 billion, below the $2.08 billion consensus estimate. Adjusted diluted earnings per share missed expectations by $0.11.
The shortfall against forecasts contrasted with growth from a year earlier. Adjusted diluted earnings increased 6% from $3.92 per share, while reported diluted earnings rose 18% to $4.24 from $3.60. Revenue increased from $2.007 billion.
The results therefore showed a gap between improving annual performance and market expectations, rather than an outright decline in quarterly earnings. Adjusted earnings are a non-GAAP measure and are distinct from the company's reported diluted earnings.
| Item | Details |
|---|---|
| Q3 operating margin | 44.8%, down from 45.7% a year earlier |
| Q3 adjusted operating margin | 52.6%, down from 52.9% a year earlier |
| Year-to-date operating cash flow | $2.471 billion, up 21% |
| Year-to-date shareholder returns | Approximately $3.1 billion, including $2.6 billion in share repurchases |
Analytics growth offsets weaker ratings revenue
Moody's Analytics generated $936 million in revenue, up 3% from a year earlier. Recurring revenue increased 6% and accounted for 99% of the division's total, while annualized recurring revenue rose 8% to $3.688 billion.
Moody's Investors Service revenue declined 1% to $1.087 billion against a record prior-year comparison. The company attributed the decline primarily to lower leveraged-finance issuance. Transaction revenue fell 5% to $714 million.
Activity was uneven across debt markets: investment-grade revenue grew 18%, while high-yield and leveraged-loan revenue fell 40% and 27%, respectively. That split shows why the ratings business can face pressure even when some financing categories remain active.
Full-year outlook stays intact
Moody's third-quarter 2026 earnings release reaffirmed full-year reported diluted earnings guidance of $16.00 to $16.50 per share alongside the unchanged adjusted range. Management also retained its forecast for revenue growth in the high-single-digit percentage range.
The unchanged outlook remains management guidance, not a completed result. Moody's said its forecasts reflect assumptions about economic conditions, interest rates, capital-market liquidity and activity across debt markets.
Separately, the board declared a quarterly dividend of $1.03 per share on October 20. It is payable on December 11, 2026, to shareholders of record at the close of business on November 20.
Conclusion
The quarterly miss did not change Moody's annual earnings targets. Delivery against those targets remains the year-end benchmark; the next confirmed shareholder date is November 20, the record date for the declared dividend.
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