Moody’s profit tops estimates in sign of credit market’s rebound

[WASHINGTON] Moody’s, a bond grader and financial data provider, reported second-quarter revenue that beat analysts’ estimates, underscoring credit markets’ relatively quick recovery from April’s tariff-fuelled tumult.

Moody’s adjusted earnings per share of US$3.56 topped analysts’ forecasts of US$3.38. Its second-quarter revenue came in at US$1.9 billion or 4.5 per cent higher year-over-year. The company also lifted the lower end of its 2025 profit guidance that it had reduced in April, and said it expects revenue from its ratings unit to increase this year.

The results highlight how corporate credit issuance was able to recover in the latter part of the second quarter, even as President Donald Trump’s tariffs and the market meltdown that ensued pushed companies to delay issuing debt for several days at the start of April.

Moody’s earned 18 per cent more from grading blue-chip debt in the second quarter than it did in the same period last year, buoyed by one of the busiest first halves of the year for the market and relatively consistent bond sales following a turbulent period in April.

That helped offset the decline Moody’s faced in the leveraged loans segment, where its ratings revenue was a third lower than in the second quarter of 2024. Companies had abandoned the bank loan market for 14 straight trading days in April, the longest such streak in data going back more than a decade.

But that market has since rebounded sharply, and Moody’s said it no longer expects the amount of debt it rates this year to decline by as much as it had indicated in April. BLOOMBERG