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Marsh & McLennan's (MMC) Q2 Earnings Miss Estimates, Up Y/Y

Marsh & McLennan Companies, Inc.MMC ) reported second-quarter 2018 adjusted earnings per share of $1.10, missing the Zacks Consensus Estimate by 0.9%. Also, the bottom line improved 10% year over year.

Marsh & McLennan Companies, Inc. Price and EPS Surprise

Marsh & McLennan Companies, Inc. Price and EPS Surprise | Marsh & McLennan Companies, Inc. Quote

Marsh & McLennan's consolidated revenues were $3.7 billion, up 3% on an underlying basis. This upside is majorly attributable to the Risk and Insurances Services plus Consulting Segments. Moreover, the top line outpaced the Zacks Consensus Estimate by 4.3%.

Total operating expenses of $3.04 billion in the second quarter were up 8.9% year over year due to high compensation and benefits as well as other operating expenses.

Quarterly Segment Results

Risk and Insurance Services

Revenues at the Risk and Insurance Services segment were $2.1 billion, up 5% on an underlying basis. Adjusted operating income also grew 9% to $532 million from the prior-year quarter's level.

Marsh, a unit within this segment, generated revenues of $1.7 billion, up 5% on an underlying basis. In U.S./Canada, underlying revenues rose 8%. Underlying revenue growth from international operations includes the same of 6% in Asia Pacific, 1% in EMEA and 3% in Latin America. This uptick was partially offset by a 2% decline in EMEA.

Another unit under this segment - Guy Carpenter - displayed revenue growth of 5% on an underlying basis to $332 million in the quarter under review.

Consulting

The Consulting segment's revenues inched up 1% on an underlying basis to $1.7 billion. However, adjusted operating income declined 5% year over year to $267 million.

A unit within this segment - Mercer - reported revenues of $1.2 billion, up 2% on an underlying basis. Wealth, with revenues of $552 million, nudged up 1% on an underlying basis.

Another unit, Oliver Wyman Group, posted revenues of $492 million, down 2% on an underlying basis.

Financial Update

Marsh & McLennan exited the quarter with cash and cash equivalents of $1.094 billion, down 14% from the figure at 2017 end.

As of Jun 30, 2018, Marsh & McLennan's total assets were $2.1 billion, up 3.6% from the tally at year-end 2017.

Total equity was $7.8 billion, up 4.8% from the level at year-end 2017.

Capital Deployment

The company bought back 3.1 million shares of its common stock for $250 million in the second quarter. The Board of Directors of the company has also hiked the quarterly dividend by 11%, payable Aug 15, 2018.

Zacks Rank

Marsh & McLennan carries a Zacks Rank #4 (Sell).

You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

Performance of Other Companies in the Finance Sector

The Progressive Corporation's PGR results beat estimates in the second quarter of 2018.

Aon plc AON is set to release second-quarter 2018 earnings on Jul 27 and the consensus mark for the same stands at $1.63 per share, representing a 12.4% increase in the year-ago period. The stock carries a Zacks Rank #3 (Hold).

Willis Towers Watson Public Limited Company WLTW is slated to release second-quarter 2018 earnings on Aug 2 and the Zacks Consensus Estimate for the same is pegged at $1.67, reflecting a year-over-year rise of 15.2%. The stock has a Zacks Rank of 3.

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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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