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Marsh & McLennan (MMC) Q1 Earnings Beat on Asia Pacific Growth
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Marsh & McLennan Companies, Inc. (MMC - Free Report) reported first-quarter 2021 adjusted earnings per share of $2.30, which outpaced the Zacks Consensus Estimate by 8%. The bottom line also rose from $1.99 per share a year ago.
MMC’s consolidated revenues improved to $5,549 million for the first quarter from $5,083 million a year ago. The top line surpassed the consensus mark of $5,508 million.
The strong first-quarter results were supported by robust contributions from its Risk and Insurance Services and Consulting segments. MMC registered significant growth across the board, which was partly offset by elevated costs. Revenues from the Asia Pacific region witnessed a significant jump from the prior-year quarter.
Marsh & McLennan Companies, Inc. Price, Consensus and EPS Surprise
Total operating expenses of $4,104 million increased from $3,725 million a year ago on account of higher compensation and benefits and other operating expenses. Expenses increased in both the segments. Yet, consolidated operating income of $1,445 million increased from the prior-year period’s $1,358 million.
Segmental Results
Risk and Insurance Services
Revenues rose 11% on an underlying basis to $3.5 billion for the quarter under review. Adjusted operating income of $1.2 billion improved 12% year over year.
Marsh, a unit within this segment, generated revenues worth $2.5 billion. The figure grew 11% on an underlying basis. In the United States/Canada, underlying revenues climbed 10% year over year. In international, the Asia Pacific region witnessed a 17% increase on an underlying basis, registering the highest growth among the regions.
Revenues from another unit under this segment, Guy Carpenter, climbed 11% on an underlying basis to $999 million for the first quarter.
Consulting
Revenues at the segment amounted to $2 billion, up 10% on an underlying basis. Adjusted operating income also improved 9% year over year to $402 million.
A unit within this segment, Mercer, reported revenues of $1.3 billion, which grew 6% on an underlying basis. Wealth and Health revenues rose 2% and 9%, respectively, on an underlying basis. The same at Career was up 16% on an underlying basis.
Another unit under the Consulting segment, Oliver Wyman’s revenues climbed 17% on an underlying basis to $667 million.
Share Repurchase Update
Marsh & McLennan bought back 3.2 million shares worth $500 million in the first quarter.
Financial Update (as of Mar 31, 2021)
MMC exited the first quarter with cash and cash equivalents of $772 million, which plunged from $1.8 billion at the 2021-end level. Total assets were $33.7 billion, down 2.1% from the figure at 2021-end.
Long-term debt amounted to $10.6 billion, which declined 3.6% from the level as of Dec 31, 2021. Short-term debt was $1.2 billion at first quarter-end. Total equity declined marginally from the 2021-end level to $11.2 billion.
Net cash outflow was $702 million at first quarter-end, up from $408 million at 2021-end.
Zacks Rank & Key Picks
Marsh & McLennan currently has a Zacks Rank #3 (Hold). Some better-ranked stocks from the finance space include Arthur J. Gallagher & Co. (AJG - Free Report) , Brown & Brown, Inc. (BRO - Free Report) and Aon plc (AON - Free Report) . While Arthur J. Gallagher sports a Zacks Rank #1 (Strong Buy), Brown & Brown and Aon carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Based in Rolling Meadows, IL, Arthur J. Gallagherbeat earnings estimates in each of the last four quarters, with an average of 8.8%. The Zacks Consensus Estimate for Arthur J. Gallagher’s 2022 bottom line indicates a 42.3% year-over-year rise.
Brown & Brown — headquartered in Daytona Beach, FL — beat earnings estimates in each of the last four quarters, with an average of 17.4%. The Zacks Consensus Estimate for Brown & Brown’s 2022 bottom line indicates a 5.9% year-over-year increase.
Ireland-based AON beat earnings estimates in each of the last four quarters, with an average of 11.6%. The Zacks Consensus Estimate for AON’s bottom line for 2022 indicates a 10.3% year-over-year rise.
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Marsh & McLennan (MMC) Q1 Earnings Beat on Asia Pacific Growth
Marsh & McLennan Companies, Inc. (MMC - Free Report) reported first-quarter 2021 adjusted earnings per share of $2.30, which outpaced the Zacks Consensus Estimate by 8%. The bottom line also rose from $1.99 per share a year ago.
MMC’s consolidated revenues improved to $5,549 million for the first quarter from $5,083 million a year ago. The top line surpassed the consensus mark of $5,508 million.
The strong first-quarter results were supported by robust contributions from its Risk and Insurance Services and Consulting segments. MMC registered significant growth across the board, which was partly offset by elevated costs. Revenues from the Asia Pacific region witnessed a significant jump from the prior-year quarter.
Marsh & McLennan Companies, Inc. Price, Consensus and EPS Surprise
Marsh & McLennan Companies, Inc. price-consensus-eps-surprise-chart | Marsh & McLennan Companies, Inc. Quote
Total operating expenses of $4,104 million increased from $3,725 million a year ago on account of higher compensation and benefits and other operating expenses. Expenses increased in both the segments. Yet, consolidated operating income of $1,445 million increased from the prior-year period’s $1,358 million.
Segmental Results
Risk and Insurance Services
Revenues rose 11% on an underlying basis to $3.5 billion for the quarter under review. Adjusted operating income of $1.2 billion improved 12% year over year.
Marsh, a unit within this segment, generated revenues worth $2.5 billion. The figure grew 11% on an underlying basis. In the United States/Canada, underlying revenues climbed 10% year over year. In international, the Asia Pacific region witnessed a 17% increase on an underlying basis, registering the highest growth among the regions.
Revenues from another unit under this segment, Guy Carpenter, climbed 11% on an underlying basis to $999 million for the first quarter.
Consulting
Revenues at the segment amounted to $2 billion, up 10% on an underlying basis. Adjusted operating income also improved 9% year over year to $402 million.
A unit within this segment, Mercer, reported revenues of $1.3 billion, which grew 6% on an underlying basis. Wealth and Health revenues rose 2% and 9%, respectively, on an underlying basis. The same at Career was up 16% on an underlying basis.
Another unit under the Consulting segment, Oliver Wyman’s revenues climbed 17% on an underlying basis to $667 million.
Share Repurchase Update
Marsh & McLennan bought back 3.2 million shares worth $500 million in the first quarter.
Financial Update (as of Mar 31, 2021)
MMC exited the first quarter with cash and cash equivalents of $772 million, which plunged from $1.8 billion at the 2021-end level. Total assets were $33.7 billion, down 2.1% from the figure at 2021-end.
Long-term debt amounted to $10.6 billion, which declined 3.6% from the level as of Dec 31, 2021. Short-term debt was $1.2 billion at first quarter-end. Total equity declined marginally from the 2021-end level to $11.2 billion.
Net cash outflow was $702 million at first quarter-end, up from $408 million at 2021-end.
Zacks Rank & Key Picks
Marsh & McLennan currently has a Zacks Rank #3 (Hold). Some better-ranked stocks from the finance space include Arthur J. Gallagher & Co. (AJG - Free Report) , Brown & Brown, Inc. (BRO - Free Report) and Aon plc (AON - Free Report) . While Arthur J. Gallagher sports a Zacks Rank #1 (Strong Buy), Brown & Brown and Aon carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Based in Rolling Meadows, IL, Arthur J. Gallagherbeat earnings estimates in each of the last four quarters, with an average of 8.8%. The Zacks Consensus Estimate for Arthur J. Gallagher’s 2022 bottom line indicates a 42.3% year-over-year rise.
Brown & Brown — headquartered in Daytona Beach, FL — beat earnings estimates in each of the last four quarters, with an average of 17.4%. The Zacks Consensus Estimate for Brown & Brown’s 2022 bottom line indicates a 5.9% year-over-year increase.
Ireland-based AON beat earnings estimates in each of the last four quarters, with an average of 11.6%. The Zacks Consensus Estimate for AON’s bottom line for 2022 indicates a 10.3% year-over-year rise.