NEW YORK (AP) — McGraw Hill Financial reported better earnings and revenue than Wall Street expected Tuesday, helped by rising demand for its exchange-traded funds as well as its commodities business.
The financial information company behind the Standard & Poor's rating agency posted net income of $248 million in the first three months of the year. That's down from $735 million in the same quarter of last year, when McGraw Hill earned $582 million from businesses it no longer owns. But income from continuing operations rose 62 percent over the year to $248 million.
The company sold its education publishing unit last year for $2.4 billion and changed its name from The McGraw-Hill Cos. to McGraw Hill Financial Inc.
On a per share basis, first-quarter earnings were 89 cents per share, down from $2.59 per share the year before. Revenue rose 5 percent to $1.24 billion.
The results came in just above Wall Street's forecasts. Analysts expected the company to report quarterly earnings of 87 cents a share and revenue of $1.23 billion, according to FactSet.
The company gets the bulk of its revenue from its rating agency segment. But that unit's revenue rose just 1 percent to $569 million. The strongest gains came from S&P Dow Jones Indices, where revenue rose 18 percent to $137 million. The company attributed half of that increase to rising demand for its exchange-traded funds and exchange-traded derivatives. At a recent $158 billion, the company's S&P 500 index fund is the largest in the world, widely used by hedge funds and other traders to bet on the direction of the stock market.
Its commodities and commercial markets group saw revenue rise 6 percent to $251 million. Revenue at Platts, its oil and metals service, increased 14 percent to $148 million.
Last month, McGraw Hill announced plans to find at least $100 million in cost savings over the next three years and said it's considering a sale of its construction division.
Shares in the company were unchanged ahead of the opening bell after closing Monday at $75.07. McGraw Hill has traded as high as $82.39 and as low as $51.56 over the past year.