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Marsh & McLennan (MMC) Q2 Earnings in Line, Revenues Beat

Marsh & McLennan Companies, Inc. MMC reported second-quarter 2017 operating earnings per share of $1, in line with the Zacks Consensus Estimate. Earnings improved 10% year over year.

Adjusted operating income rose 7% to $788 million in the second quarter.

Marsh & McLennan’s consolidated revenues were $3.5 million, up 4% year over year on an underlying basis. Revenues beat the Zacks Consensus Estimate by 1.2%.

 Total operating expenses of $2.7 million increased 3% year over year.

 

Segment Results

Risk and Insurance Services

Revenues at the Risk and Insurance Services segment were $1.9 billion, up 4% year over year on an underlying basis. Adjusted operating income also grew 9% to $535 million from the last-year quarter.

A unit within this segment – Marsh – reported revenues of $1.6 million, up 4% year over year on an underlying basis. Underlying revenues grew 1% year over year in international operations on 4% growth in Latin America, 3% in the Asia Pacific, and 2% in the U.S.-Canada region. However, the underlying revenues remained flat year over year for EMEA (Europe, Middle East and Africa).

Another unit under this segment, Guy Carpenter, displayed revenue growth of 4% year over year on an underlying basis to $293 million.

Consulting

The Consulting segment's revenues increased 3% year over year on an underlying basis to $1.59 billion. Additionally, adjusted operating income inched up 3% year over year to $298 million.

A unit within this segment – Mercer – reported revenues of $1.1 billion, up 3% year over year on an underlying basis.

Another unit, Oliver Wyman Group, reported revenues of $483 million, up 7% year over year on an underlying basis.

Financial Update

Marsh & McLennan exited the quarter with cash and cash equivalents of $966 million, down 6% from end-2016.

As of Jun 30, 2017, Marsh & McLennan’s total assets were $19 million, up 7% year over year.

Total equity was $7 million, up 13% from year-end 2016.

Capital Deployment

Marsh & McLennan spent $200 million to buyback 2.7 million shares in the second quarter.

The board of directors raised the quarterly dividend by 10% to 37.5 cents per share in May 2017. The dividend is payable on Aug 15, 2017, to shareholders of record as on Jul 27, 2017.

Zacks Rank

Marsh & McLennan presently carries a Zacks Rank #4 (Sell). You can see https://www.zacks.com/stocks/buy-list/?ADID=zp_1link&ICI... _1link">the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Insurers

Among other players from the insurance industry that have reported their second-quarter earnings so far, the bottom line at Brown & Brown, Inc. BRO and Fidelity National Financial, Inc. FNF beat the Zacks Consensus Estimate, while The Progressive Corporation PGR missed the same.

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Marsh & McLennan Companies, Inc. (MMC): Free Stock Analysis Report
 
Brown & Brown, Inc. (BRO): Free Stock Analysis Report
 
Progressive Corporation (The) (PGR): Free Stock Analysis Report
 
Fidelity National Financial, Inc. (FNF): Free Stock Analysis Report
 
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