Marsh & McLennan Cos. Inc.
) reported its first-quarter 2013 operating earnings of 73 cents
per share, comfortably surpassing the Zacks Consensus Estimate of
70 cents and the year-ago quarter earnings of 63 cents per
Operating net income, which excludes one-time items in both
the periods, increased 16.3% year over year to $406 million. On a
reported basis, Marsh & McLennan recorded net income of $401
million or 72 cents per share in the reported quarter, up from
$347 million or 63 cents per share in the prior-year quarter.
Marsh & McLennan posted improved results on account of
modest revenue growth across its Risk and Insurance business
along with strict expense control, which also drove the operating
margin. These were partially offset by weak revenue growth in
Consulting segment and higher tax expense.
Consolidated revenues were $3.13 billion, climbing 2.5% year
over year and 2% on an underlying basis. However, it missed the
Zacks Consensus Estimate of $3.2 billion.
Meanwhile, total operating expenses dipped 0.2% year over year
to $2.52 billion as compensation and benefits marginally rose
0.4% to $1.8 billion, while other expenses decreased 1.6% to $716
million. Additionally, adjusted operating margin improved to
17.4% from 19.7% in the year-ago period. Nevertheless, tax
expenses escalated to $176 million against $153 million in the
Revenues for the
Risk and Insurance Services
segment were $1.8 billion, up 5% on a year-over-year basis.
Moreover, adjusted operating income was up 14% year over year
reaching $471 million, reflecting improved performance at
Marsh's revenues came in at $1.4 billion, up 5% year over year
and 4% on an underlying basis, driven by strong new businesses
and growth across geography in the quarter. Underlying revenue
grew 5% in international operations reflecting 13% growth in
Latin America, 6% in Asia Pacific and 3% in EMEA. Meanwhile,
underlying revenue growth in the U.S.-Canada region stood at
Guy Carpenter's revenues during the reported quarter were $375
million, up 5% on year-over-year and 4% on underlying basis.
segment's revenues dipped 1% on year-over-year and were flat on
underlying basis at $1.4 billion. Additionally, adjusted
operating income grew 15% year over year to $189 million.
's revenues stood at $1.0 billion, up 3% on both year over year
and underlying basis. Mercer's retirement operations generated
revenues of $343 million, down 1% on an underlying basis.
Additionally, Health revenue grew 6% to $381 million, whereas
revenues from Talent decreased 4% to $123 million. Revenue from
Investments increased 9% to $194 million, on underlying
's revenues decreased 9% on an underlying basis to $321 million
in the reported quarter.
During the reported quarter, Marsh & McLennan total
investment income, including private equity investments, grew to
$21 million against $20 million in the year-ago quarter.
Meanwhile, capital expenditure escalated to $126 million from $51
million in the year-ago period.
Marsh & McLennan exited the reported quarter with cash and
cash equivalents of $1.26 billion, down from $2.3 billion in
2012. Long-term debt swelled to $2.71 billion from $2.66 billion
at the end of 2012.
As of Mar 31, 2013, Marsh & McLennan's total assets
depreciated to $15.54 billion, while total shareholders' equity
increased to $6.71 billion from 2012-end.
Additionally, the company bought back 2.7 million shares for
$100 million during the reported quarter, while $223 million
worth of stock remains available for repurchases under the
On Mar 20, 2013, the board of Marsh & McLennan announced a
quarterly common stock dividend of 23 cents a share, which is
payable on May 15, 2013 to the shareholders of record as on Apr
On Feb 15, 2013, Marsh & McLennan paid a quarterly common
stock dividend of 23 cents a share to the shareholders of record
as on Jan 28, 2013.
Marsh & McLennan carries a Zacks Rank #3 (Hold). Other
strong performers in the insurance sector include
Employers Holdings Inc.
Hilltop Holdings Inc.
Navigators Group Inc.
), all of which carry a Zacks Rank #1 (Strong Buy).
EMPLOYERS HLDGS (EIG): Free Stock Analysis
HILLTOP HLDGS (HTH): Free Stock Analysis
MARSH &MCLENNAN (MMC): Free Stock Analysis
NAVIGATORS GRP (NAVG): Free Stock Analysis
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