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Globe and Mail
9 hours ago
- Business
- Globe and Mail
Moody's Earnings Call Highlights Growth and Optimism
Moody's ((MCO)) has held its Q2 earnings call. Read on for the main highlights of the call. Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. Moody's Earnings Call Reflects Positive Sentiment Amid Revenue Growth and Strategic Investments The recent earnings call for Moody's Corporation conveyed a generally positive sentiment, underscored by notable revenue growth and strategic advancements. While challenges were acknowledged in areas like Corporate Finance and Structured Finance issuance, the overall outlook remains optimistic, driven by strong performance in private credit and Moody's Analytics segments. The company's strategic investments in GenAI and private credit further contribute to this positive sentiment. Revenue Growth Moody's reported a revenue of $1.9 billion for the second quarter of 2025, marking a 4% increase year-over-year. The adjusted operating margin saw an improvement to 50.9%, up 130 basis points from the previous year, highlighting the company's robust financial health. Earnings Per Share Increase The company achieved a significant milestone with an adjusted diluted EPS of $3.56, reflecting a 9% growth compared to the previous year and a remarkable 60% increase from the same quarter three years ago. Private Credit Revenue Surge Private credit-related transactions were a standout, accounting for nearly 25% of first-time mandates. Revenue from private credit grew by an impressive 75% in the second quarter, showcasing the company's strong foothold in this market. Moody's Analytics Performance Moody's Analytics segment delivered an 11% revenue growth and a 12% increase in recurring revenue. The adjusted operating margin improved by 360 basis points year-over-year to 32.1%, reflecting the segment's robust performance. GenAI Integration The integration of GenAI into Moody's products is progressing well, with approximately 40% of products now featuring some form of GenAI enablement. Early adopter customers have contributed nearly $200 million, with spending growing at twice the rate of Moody's Analytics overall. Corporate Finance Transaction Revenue Decline Despite the overall positive outlook, Corporate Finance transaction revenue experienced a 6% decline year-over-year. This was attributed to a slowdown in bank loans issuance and subdued M&A activity. Structured Finance Issuance Decline Structured Finance issuance faced a 25% decline in the second quarter due to market volatility and wider spreads in April. However, transaction revenue only saw a 3% decline, thanks to a favorable mix. KYC Growth Deceleration The growth of KYC ARR moderated to 15%, impacted by the strategic termination of a long-standing redistribution partnership. This decision affected new business growth but aligns with Moody's strategic direction. Forward-Looking Guidance Moody's provided an optimistic forward-looking guidance during the earnings call. The company expects full-year revenue growth in the mid-single-digit percent range and has adjusted its fiscal guidance accordingly. With a focus on disciplined expense management and continued investment in growth opportunities, Moody's remains optimistic about the second half of the year. Strategic investments in private credit markets and partnerships are expected to drive future growth. In conclusion, Moody's earnings call painted a positive picture of the company's financial health and strategic direction. Despite some challenges in specific segments, the overall sentiment was buoyant, driven by strong revenue growth, strategic investments, and a promising outlook for the future.
NDTV
a day ago
- Business
- NDTV
Trump's First Five Trade Deals Ahead Of August 1 Deadline
France: Japan and the Philippines take to five the number of countries that have concluded trade deals with the United States ahead of an August 1 deadline set by President Donald Trump to avoid punitive tariff rates. The agreed levies are often higher than the new base rate of 10 percent that the United States has applied to most countries since April, but far less than the levels the Trump administration has threatened to impose if no deal is reached. While many details remain to be negotiated under the deals, it is clear countries made considerable concessions to reach an agreement with the United States. Japan: 15% Under the terms of the trade deal with Japan that Trump called "massive", the country's exports will be taxed at 15 percent instead of the threatened 25 percent rate. Crucially, Tokyo managed to have an existing and painful 25 percent tariff on its automobiles, an industry accounting for eight percent of Japanese jobs, cut to 15 percent. Moody's Analytics analyst Stefan Angrick said 15 percent was still much higher than the low single-digit rates in effect before Trump returned to the White House. "Relative to that it's not exactly good news," he noted. "I think 15 percent is a much, much higher tariff rate than many, many were expecting. And it's important to keep that in mind." The 50 percent tariffs on Japanese steel and aluminium will continue to apply. The White House said that under the deal, Japan will make $550 billion in investments in the United States. These will be in areas including energy infrastructure, semiconductor and drug manufacturing, the mining and production of critical minerals, as well as commercial and military shipbuilding. Washington said the United States will retain 90 percent of the profits from these investments and that Japan will buy $8 billion worth of US goods, including farming produce, aviation fuel and 100 Boeing planes. The White House also said Japan will lift "longstanding restrictions" on US cars and trucks -- which sell poorly in Japan -- and boost US rice imports by 75 percent. "The magnitude of the concessions made by the Japanese government could make one fear very complicated negotiations with others like the European Union," said analyst Bastien Drut at CPR Asset Management in Paris. Philippines: 19% Under an accord announced by the White House, the Philippines obtained a tariff reduction of one percentage point on its goods entering the United States. Products from the Southeast Asian country, a major exporter of high-tech items and apparel, will face a 19 percent levy. Britain: 10% on average London and Washington concluded a deal in May that sees a 27.5 percent tariff rate on cars dropped to 10 percent for the first 100,000 vehicles per year, which is a big win for Jaguar Land Rover. The deal also benefits the British aerospace sector, in particular jet engine manufacturer Rolls Royce, which won a tariff exemption. London is still negotiating exemptions for its steel and aluminium products from the 25 percent rate in force. But Britain had to open its market further to US ethanol and beef. The rest of its products are subject to the 10 percent base rate. Vietnam: 20% Vietnam reached a deal at the beginning of July with the United States, its main export market for products including clothing and shoes, that will see its shipments subject to a 20 percent tariff, instead of the threatened 46 percent rate. But a 40 percent tariff will hit goods passing through the country to circumvent steeper trade barriers. US goods won't face any tariffs to enter Vietnam. Indonesia: 19% Under the deal reached last week, Indonesian goods entering the United States will be hit with a 19 percent tariff, lower than the threatened rate of 32 percent. Certain Indonesian goods not available in the United States could face even lower rates. According to Washington, nearly all US goods will be able to enter Indonesia tariff free. Moreover, it said Jakarta had agreed to recognise US standards for car and pharmaceutical imports. It also agreed to drop an effort to tax data flows and ease export restrictions on critical minerals. The deal followed Indonesia making concessions earlier in July with pledges to buy more US agricultural goods and oil.
The Star
a day ago
- Entertainment
- The Star
Domestic tourism in Puerto Rico surges, thanks to Bad Bunny
Puerto Rico's summers are a time when tourism slows, hurricanes threaten and power outages increase. But this year's doldrums have an unlikely bright spot: Bad Bunny. The superstar's 30-date concert run at the Coliseo de Puerto Rico that started on July 11 has led to a once-in-a-generation surge in flights and hotel bookings, giving the economy a trap-flavoured kick. Discover Puerto Rico, the island's tourism promotion agency, says it's expecting 600,000 visitors during the period – about twice the average for those months – with the concerts pumping an estimated US$181mil (RM768.23mil) into the local economy. The agency has no record of a single event that brought this many people to the island, not even Old San Juan's famed annual San Sebastian festival. Moody's Analytics recently upgraded its economic forecast for the United States territory to account for a 'Bunny bump'. The artist even posted a photo recently on his Instagram account with a woman holding a sign that reads, 'Shop local for Bad Bunny's concert.' World tours are common in an era of globalised pop. And they can have a real impact on host cities, with Harvard Business Review estimating that Taylor Swift's blockbuster Eras Tour poured US$10bil (RM42.44bil) into local economies across several continents. But what Bad Bunny is doing – staying put – is unprecedented outside of Las Vegas residencies, said Jorge Perez, whose company runs the 18,500-seat Coliseo. 'You have the number one artist in the world who just released an album and is telling his followers, 'I'm not going on tour, I'm going to have 30 dates, and if you want to see me, come to my island',' said Perez, regional manager of ASM Global. While Bad Bunny is going on a world tour, he only announced it after all the Puerto Rico dates were sold out. Perez said the San Juan coliseum, affectionately known as the Choliseo, sold 450,000 tickets within four hours – a record for the venue. Tourism jobs, which usually hover around 100,000 on an island of 3.2 million people, could see a temporary spike of about 3%, said Gustavo Rojas-Matute, assistant director of Moody's Analytics. The jump could have been as high as 8% if the local economy wasn't essentially at full employment, he said. And the concerts are expected to boost GDP by about 0.15 percentage points, just enough to keep the economy from flat-lining for the fiscal year. The influx of visitors '... is going to boost employment in the tourism sector for at least a quarter, but it's probably going to carry out a little bit into the future,' Rojas-Matute said. Since the residency was announced, thousands of accommodation bookings have been made near the show's venue. Bad Bunny, whose real name is Benito Antonio Martinez Ocasio, is a one-time grocery bagger who has become one of the world's most bankable stars. He has appeared in the American Super Bowl half-time show, acted alongside Hollywood star Brad Pitt, and made frequent appearances on Saturday Night Live and the Tonight Show. His latest album, Debi Tirar Mas Fotos (I Should Have Taken More Pictures) is infused with salsa, bomba and plena rhythms that showcase his Puerto Rican roots. Carolina Ramirez of New York snagged six tickets to see Bad Bunny with relatives in August. Her family, much of which still lives on the island, decided to turn the event into a reunion of sorts. The tickets cost about US$200 (RM850) each, and Ramirez spent US$800 (RM3,395) for her flight. She's expecting a house rental with her cousins and sister to run about US$1,000 (RM4,244) per person. 'Family is a priority for me,' said Ramirez, a partnership manager for excursion company Virgin Experience Gifts. 'I don't mind spending that much money and making this trip, because it's turned into a whole celebration. And I just love going back to the island.' Discover Puerto Rico said there have already been 35,742 room nights sold in connection with the concerts at the 34 hotels it has been tracking. The agency has been flooding social media with tourism tips for Bad Bunny's fans, hoping they'll build entire itineraries around the shows. 'We're trying to get people to come before the concert and stay after and encourage them to get outside the metro area,' said Glorianna Yamin, Discover Puerto Rico's vice president of marketing. 'We want to capitalise on this captive audience.' Bad Bunny will start his world tour only after he is done with the residency in his hometown. One of those hoping to cash in on the concert crowds is Sara Contreras, who owns two Airbnbs in Fajardo, a water-sports hub about 45 minutes from the capital. Fans are already booking the rentals in August, and she's banking on a similar boost for September, typically a slow month. 'When people are reaching out, they're saying, 'We are going to Bad Bunny, and we're extending our trip',' said Contreras, a standup comedian who splits her time between New Jersey and Puerto Rico. East Island Excursions, which runs boat charters, has introduced a 'Coffee And Salsa' day tour – frequent themes on the new album – to appeal to concertgoers. 'We are really hopeful,' said Sorren Varney, the company's director of sales and customer experience. 'We want this Bad Bunny boom to trickle down to everyone.' The artist has a complicated relationship with the island's political class. During the last general election, he actively campaigned for an alliance of opposition parties that promote independence from the US, and he financed billboards calling the current leadership corrupt. (Governor Jenniffer Gonzalez seems to have forgiven him, offering free concert tickets to select public workers and students.) In addition, Bad Bunny's refusal, thus far, to announce any tour dates on the US mainland has been interpreted by some as a political rebuke to President Donald Trump's 'America'. Albert Laguna, who is teaching a Bad Bunny course at Yale University this fall, said Bunny's decision to anchor his world tour in Puerto Rico is shining a light on the territory's complicated history and its economic addiction to US visitors. 'You can kind of critique tourism all day, but also that person who can be selling water bottles outside the stadium – he's going to have a good month or two,' he said. 'Life is complicated and messy.' – Bloomberg
Boston Globe
2 days ago
- Business
- Boston Globe
Trump says he's ‘solved the inflation problem.' The economic data tell a different story.
Get Starting Point A guide through the most important stories of the morning, delivered Monday through Friday. Enter Email Sign Up In other words, conventional wisdom and Fed officials have been correct and Trump — along with the other unidentified survey participant — have gotten it wrong so far. And a poll released over the weekend indicates most Americans also disagree with Trump's assessment of the economy. Advertisement 'The tariffs were forecast to slow growth and raise inflation,' said Mark Zandi, chief economist at economics and research consulting firm Moody's Analytics. 'That's exactly what they're doing.' Advertisement Inflation had been trending down close to normal the past couple of years since reaching a four-decade high in 2022. But consumer prices have been moving up in recent months, including a 0.3 percent increase in June. Still, Trump continues to claim that inflation is no longer a worry. 'We solved the inflation problem,' Trump told reporters Tuesday. After the Labor Department released the June consumer price index last week, showing the annual inflation rate was up to 2.7 percent, When asked to send a copy of the survey or an online link, White House spokesperson Kush Desai only sent a statement saying that 'the data has clearly vindicated President Trump.' 'So-called economic 'experts' have expended metric tons of hot gas predicting doom and gloom, from inflation to recession, about President Trump's America First economic agenda of tariffs, deregulation, and tax cuts,' Desai said. 'The exact opposite has transpired — inflation has cooled, trillions in historic investment commitments are pouring in, hundreds of thousands of jobs have been created, and billions in tariff revenue are being collected." The survey was not produced after two follow-up requests, either. Regardless of Desai's assertions, Americans don't appear to be buying the White House inflation message. Advertisement A Trump is finding out what other presidents have discovered: it's difficult to spin the public on inflation when they're experiencing the rising prices in their everyday lives. 'Donald Trump lives in his own fact-free bubble,' said Senator Elizabeth Warren, a Massachusetts Democrat. 'Yes, there is inflation. And yes, the direction is upward.' Former president Joe Biden's economic approval rating never recovered after inflation soared starting in 2021. He downplayed the price increases and In Trump campaigned on a pledge to lower prices. But that hasn't happened. 'Where Trump sort of lost the public is that the very first thing he did was increase tariffs, which increased prices, which seemed to go against everything he promised to do,' said Democratic strategist Simon Rosenberg, who closely follows economic data. 'He often tells a false story about what's happening in the economy, and voters, I think, are aware that what he's saying isn't true.' Advertisement But Senator Rick Scott, a Florida Republican and strong Trump ally, said it's too early to judge the president's policies. 'Biden left him in a horrible situation,' Scott said. 'It's going to take some time.' Another Senate Republican, Mike Rounds of South Dakota, highlighted the decline in gas prices in recent months and argued that Trump hasn't really meant to say that there's no inflation at all. 'They understand exactly what he's trying to say, which is, you're not seeing it spike right now,' Rounds said of Americans. 'But it's higher than what we want it to be. We're going to have to continue to focus on bringing it down.' Trump's view that the inflation problem has been solved is at the heart of his The Fed aggressively raised its benchmark interest rate to more than 5 percent starting in 2022 to battle high inflation by slowing the economy. As price growth eased, Fed officials slowly started lowering the rate in 2024. They planned to continue the cuts this year until Trump started raising tariffs while threatening higher ones. Fearful that inflation would accelerate, the Fed halted its rate cuts amid Trump's frequently shifting tariff hikes and deadlines. Many countries are facing high new reciprocal US tariffs on Aug. 1 if they do not agree to trade deals by then or Trump doesn't extend the deadline. Rosenberg said Trump's push for the Fed to lower interest rates shows that administration officials know that inflation is becoming a problem even if they're not saying it publicly. Advertisement 'They know the tariffs are slowing the economy down and raising prices, and they need to do something to lower costs for people and to accelerate the economy,' he said. 'It's an admission that they understand that the tariffs are doing harm to the economy.' Jim Puzzanghera can be reached at
Axios
3 days ago
- Business
- Axios
There's a growing sentiment gap between rich and poor Americans
Higher-earning Americans are feeling pretty good these days, but sentiment among those at the bottom is stagnating at much lower levels. Why it matters: There's long been a gap like this between rich and poor —more money often means fewer problems. But this year the difference in sentiment between the top and bottom is at its widest since Morning Consult began tracking the data in 2018. How it works: The research firm measures sentiment by asking adults how they feel about their own personal finances, business conditions overall, and if a major purchase is a good idea. They roll those answers into an index; any number above 100 indicates positive sentiment. By the numbers: On July 21, the index for those earning more than $100,000 a year was at 122. That's nearly 33 points higher than sentiment among those earning less than $50,000. Since mid-June, the gap between rich and poor has been consistently greater than 30 points. Zoom out: There's a few things driving the vibes apart. 📈 The stock market. The S&P 500 has bounced back — and then some — from its April "Liberation Day" lows. A rising 401(k) drives spirits higher. But the vast majority of low-income adults don't have money invested in stocks at all. 🏡 Home values. Higher house prices make homeowners feel great — a high Zestimate is a mood booster. That does nothing for renters, except make them feel increasingly locked out of the American dream. 👷♀️ The job market. While overall unemployment still seems low, lower-earning adults are increasingly reporting a loss of pay or income in Morning Consult's data, says chief economist John Leer. The big picture: When consumers feel good, they spend money — and high-earners' spending drives the economy. Outlays by those in the top 20% account for 60% of spending overall in the U.S., per data from Moody's Analytics. "Investors are flocking into companies that can successfully sell to high income consumers," says Leer. Some policymakers are worried that strong top-line metrics are masking a lot of financial vulnerability, some of which could worsen as cuts to the safety net in the 'big, beautiful bill" start kicking in. Yes, but: Even among the top earners, things aren't as rosy as they might first appear. "Despite more upbeat consumer confidence, particularly among the well-to-do, they are not spending with any gusto," Mark Zandi, chief economist at Moody's Analytics, tells Axios. Stock market volatility has made folks nervous about spending, he says. Spending growth among the top 20% has flatlined this year, after surging in 2023 and 2024, he says.
