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Marsh & McLennan (MMC) Q1 Earnings Top, Revenues Beat

Marsh & McLennan Companies, Inc.MMC reported first-quarter 2016 operating earnings per share of 92 cents, which beat the Zacks Consensus Estimate by 3.4%. Earnings also improved 1.1% year over year.

Quarterly Details

Marsh & McLennan's consolidated revenues were $3.3 billion, up 3.8% year over year. Revenues marginally surpassed the Zacks Consensus Estimate.

Total operating expenses of $2.6 billion increased nearly 5% year over year on higher compensation and benefits.

Adjusted operating margin at Marsh & McLennan contracted 120 bps to 22.1% from 23.3% in the year-ago quarter.

Segment Results

Revenues from the Risk and Insurance Services segment were $1.9 billion, up 2% on an underlying basis. However, adjusted operating income decreased 3% year over year to $543 million.

Marsh's revenues came in at $1.5 billion, up 2% on an underlying basis. Underlying revenues grew 2% year over year in international operations, which reflects 6% growth in Latin America, 3% in Asia Pacific and 1% in EMEA (Europe, the Middle East and Africa). The U.S.-Canada region reported a 2% year-over-year increase in revenues.

Guy Carpenter's revenues during the reported quarter were $374 million, up 3% year over year on an underlying basis.

The Consulting segment's revenues increased 6% year over year on an underlying basis to $1.5 billion. Additionally, adjusted operating income decreased 3.6% year over year to $238 million.

Mercer's revenues were $1 billion, up 3% on an underlying basis. The segment's Retirement operations generated revenues of $312 million, flat on an underlying basis. Additionally, underlying revenues grew 6% to $400 million for Health , 1% to $131 million for Talent and 1% to $196 million for Investments , all on a year-over-year basis. Oliver Wyman's revenues increased 15% on an underlying basis to $439 million in the reported quarter.

Financial Update

Marsh & McLennan exited the quarter with cash and cash equivalents of $0.9 billion, down 33.2% from $1.4 billion at year-end 2015.

As of Mar 31, 2016, Marsh & McLennan's total assets were $18.1 billion, down 0.5% from $18.2 billion at the end of 2015. Total equity was $6.8 billion, up 2.6% from $6.6 billion at year-end 2015 end.

Share Buyback

Marsh & McLennan bought back 3.5 million shares for $200 million during the quarter.

Zacks Rank & Performance of Other Insurers

Marsh & McLennan holds a Zacks Rank #2 (Buy). Some other insurers too recently released their first-quarter earnings results. While the bottom line at RLI Corp. RLI and First American Financial Corp. FAF beat their respective Zacks Consensus Estimate, Progressive Corp. PGR missed the same in the first quarter.

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MARSH &MCLENNAN (MMC): Free Stock Analysis Report

RLI CORP (RLI): Free Stock Analysis Report

PROGRESSIVE COR (PGR): Free Stock Analysis Report

FIRST AMER FINL (FAF): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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