By Sam Boughedda
Shares of S&P Global (NYSE:SPGI) opened over 10% lower Wednesday after it announced it is suspending financial guidance for the full-year 2022. Shares have since recovered much of the losses, last trading down 2.6%.
The financial firm cited deteriorating macroeconomic conditions as the reason for the guidance withdrawal, which has negatively impacted the company's expectations for GDP growth and debt issuance volumes.
"Given the volatility and uncertainty in the issuance environment, the company cannot affirm its previously issued guidance and expects to reintroduce formal financial guidance in conjunction with its second-quarter 2022 earnings results," SPGI said in a statement.
SPGI stated debt issuance volumes have been "extraordinarily weak" year-to-date, and if similar trends continue to the end of the year, market issuance could see year-over-year declines in the high teens.
"Rated, or billed, issuance could be approximately 30-35% lower than the previous year, and leveraged loan volumes could be approximately 40% lower," they explained.
If this were to occur, ratings revenue could be negatively impacted by up to $600 million relative to previous revenue guidance.
Following the announcement, BMO Capital analyst Jeffrey Silber commented that "this would imply 2022 adjusted EPS in the low $12 range vs. consensus $13.06 (about 8% lower)."
The warning from S&P Global is also impacting shares of rival Moody's (NYSE:MCO), which is trading down 2.9% in early trading.
S&P Global CFO, Ewout Steenbergen, will be presenting at the Deutsche Bank (ETR:DBKGn) Global Financial Services Conference at 3PM ET this afternoon and will likely shed more light on today's warning.