Moody's Shares Decline Nearly 3% as Third-Quarter Earnings and Revenue Miss Estimates

Moody’s Corporation (NYSE:MCO) shares fell 2.81% following the release of its third-quarter 2026 financial results, as the credit ratings and financial analytics provider reported earnings and revenue below analysts’ expectations while maintaining its full-year guidance.

The company posted adjusted earnings per share of $4.14, compared with the market consensus of $4.25, representing a shortfall of $0.11 per share.

Quarterly revenue totalled $2.02 billion, below analysts’ forecasts of $2.08 billion. Revenue increased 1% from $2.01 billion in the corresponding period last year, while organic revenue growth at constant exchange rates reached 3%.

Despite the results falling short of market estimates, Moody’s reaffirmed its adjusted earnings guidance for 2026 at between $16.50 and $17.00 per share.

The midpoint of the projected range, at $16.75, remains below the analyst consensus estimate of $16.90 per share.

The company also maintained its forecast for full-year revenue growth in the high-single-digit percentage range.

Rob Fauber, President and Chief Executive Officer of Moody’s, commented on the company’s quarterly performance.

“Moody’s delivered another quarter of strong profitability and earnings growth, with disciplined execution and healthy cash generation amidst an increasingly complex operating environment,” Fauber said.

Within the company’s operating divisions, Moody’s Analytics generated third-quarter revenue of $936 million, an increase of 3% compared with the previous year.

On an organic constant-currency basis, the division recorded revenue growth of 8%.

Recurring revenue accounted for 99% of Moody’s Analytics’ total revenue during the quarter, reflecting the subscription-based nature of much of the division’s business.

Annualised recurring revenue increased 8% year on year to $3.7 billion.

Meanwhile, Moody’s Investors Service, the company’s credit ratings division, reported revenue of $1.09 billion, representing a 1% decline from the prior-year period.

The decrease primarily reflected lower issuance activity in the leveraged finance market compared with the record levels recorded a year earlier.

Moody’s adjusted operating margin stood at 52.6% in the third quarter, compared with 52.9% in the corresponding period of 2025, representing a reduction of 30 basis points.

The company also reported returning approximately $3.1 billion to shareholders during the first nine months of 2026.

Of that amount, $2.6 billion was distributed through share repurchases, with the remaining capital returned through other shareholder distributions.

The quarterly figures highlighted differing trends across Moody’s two principal divisions, with growth in recurring analytics revenue contrasting with lower activity in certain credit issuance markets.

Investors will continue to assess whether growth in Moody’s Analytics and developments in debt capital markets can support the company’s maintained earnings and revenue outlook for the remainder of 2026.

Moody’s stock price