Marsh & McLennan (MMC) Q1 Earnings Top Estimates, Up Y/Y

Marsh & McLennan Companies, Inc. MMC reported first-quarter 2018 adjusted earnings per share of $1.38, beating the Zacks Consensus Estimate by 6.1%. Also, the bottom line improved 28% year over year.

In the quarter under review, Marsh & McLennan’s consolidated revenues were $4 billion, up 4% on an underlying basis. Moreover, the top line outpaced the Zacks Consensus Estimate by 4.3%.

Total operating expenses of $3,092 million in the first quarter were up 12.3% year over year.

Quarterly Segment Results

Risk and Insurance Services

Revenues at the Risk and Insurance Services segment were $2.3 billion, up 3% on an underlying basis. Adjusted operating income also grew 30% to $723 million from the prior-year quarter.

Marsh, a unit within this segment, generated revenues of $1.7 billion, up 2% on an underlying basis. In U.S./Canada, underlying revenues rose 3%. Underlying revenue growth remained flat from international operations, reflecting underlying growth of 4% in Asia Pacific and 6% in Latin America. This was partially offset by a decline of 2% in EMEA.

Another unit under this segment — Guy Carpenter — displayed revenue growth of 7% on an underlying basis to $637 million.

Consulting

The Consulting segment's revenues increased 5% on an underlying basis to $1.7 billion. Additionally, adjusted operating income increased 8% year over year to $248 million.

A unit within this segment — Mercer — reported revenues of $1.2 billion, up 5% on an underlying basis. Wealth with revenues of $565 million, grew 3% on an underlying basis.

Another unit, Oliver Wyman Group, posted revenues of $497 million, up 6% on an underlying basis.

Marsh & McLennan Companies, Inc. Price, Consensus and EPS Surprise

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

 

Financial Update

Marsh & McLennan exited the quarter with cash and cash equivalents of $1,168 million, down 3% from 2017 end.

As of Mar 31, 2018, Marsh & McLennan’s total assets were $21,379 million, up 4.6% from year-end 2017.

Total equity was $8,021 million, up 7.8% from year-end 2017.

Capital Deployment

The company repurchased 3 million shares of its common stock for $250 million in the first quarter.

Zacks Rank

Marsh & McLennan carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Companies in the Finance Sector

Among other players in the Finance sector, which have reported first-quarter earnings so far, Bank of America Corporation BAC, Citigroup Inc. C and U.S. Bancorp USB beat the respective Zacks Consensus Estimate.

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