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Marsh & McLennan Companies, Inc. (MMC - Free Report) reported third-quarter 2022 adjusted earnings per share of $1.18, which outpaced the Zacks Consensus Estimate by 1.7%. The bottom line rose 9% year over year.
Consolidated revenues of MMC amounted to $4.8 billion, which grew 4% year over year in the quarter under review but fell short of the consensus mark by 1.7%.
Solid performances of the Risk and Insurance Services, and Consulting segments drove the quarterly results of Marsh & McLennan. The quarter witnessed an adjusted operating margin expansion of 110 basis points year over year. However, elevated compensation and benefits expense partially offset the margins.
Total expenses increased 3.5% year over year to $4 billion in the third quarter due to higher compensation and benefits, and other operating expenses. While total expenses at the Risk and Insurance Services segment rose 1.9% year over year, the same at the Consulting segment witnessed a 5.3% year-over-year rise.
Consolidated adjusted operating income of $851 million climbed 12% year over year.
Marsh & McLennan Companies, Inc. Price, Consensus and EPS Surprise
The segment’ revenues of $2.8 billion rose 9% on an underlying basis in the third quarter but fell short of the Zacks Consensus Estimate of $2.9 billion. The adjusted operating income of $562 million climbed 20% year over year and surpassed the consensus mark of $503 million.
Revenues of Marsh, a unit within the segment, came in at $2.5 billion. The figure improved 8% on an underlying basis. In the United States/Canada, underlying revenues grew 5% year over year. International operations generated revenue growth of 11% on an underlying basis. Among the international operations, Latin America recorded highest revenue growth of 15%, followed by increases of 14% and 9% in the Asia Pacific and EMEA, respectively.
Revenues of Guy Carpenter, another unit under the Risk and Insurance Services segment, witnessed a 7% increase on an underlying basis to $328 million.
Consulting
The segment generated revenues of $2 billion, up 8% on an underlying basis. The adjusted operating income advanced 3% year over year to $362 million in the third quarter but lagged the consensus mark of $385 million.
A unit within this segment, Mercer reported revenues of $1.3 billion. The figure improved 5% on an underlying basis. Career and Health revenues climbed 15% and 10%, respectively, on an underlying basis. However, the same at Wealth dipped 1% on an underlying basis.
Oliver Wyman, another unit under the Consulting segment, recorded revenues of $667 million, up 13% on an underlying basis in the quarter under review.
Financial Update (as of Sep 30, 2022)
Marsh & McLennan exited the third quarter with cash and cash equivalents of $802 million, which dropped 54.2% from the figure at 2021 end. Total assets of $32 billion declined 6.9% from the level as of Dec 31, 2021.
Long-term debt amounted to $10.4 billion, down 4.9% from the 2021-end level. Short-term debt came in at $967 million, which increased nearly 57-fold from the figure at 2021 end.
Total equity declined 12.8% from the 2021-end level to $9.8 billion.
During the nine months ended Sep 30, 2022, MMC’s net cash provided by operating activities came in at nearly $2 billion. The metric decreased 5.4% from the prior-year comparable period’s level.
Capital Deployment Update
Marsh & McLennan bought back 3.1 million shares worth $500 million in the third quarter.
In September 2022, management sanctioned a quarterly dividend of 59 cents per share, which will be paid out on Nov 15, 2022, to its shareholders of record as of Oct 7.
Of the insurance industry players that have reported third-quarter results so far, The Travelers Companies, Inc. (TRV - Free Report) and RLI Corp. (RLI - Free Report) beat the respective Zacks Consensus Estimate for earnings.
Travelers reported third-quarter 2022 core income of $2.20 per share, which beat the Zacks Consensus Estimate by 24.3%. The bottom line, however, decreased 15.4% year over year. TRV’s total revenues increased 6.8% from the year-ago quarter’s level to $9.4 billion, primarily on higher premiums and fee income. The top-line figure beat the Zacks Consensus Estimate by 2.5%. Net written premiums increased 110% year over year to $9.2 billion.
RLI’s operating earnings of 50 cents per share beat the Zacks Consensus Estimate by 51.5% but declined 23.1% from the prior-year quarter’s level. Operating revenues of RLI were $312.7 million, up 15.3% year over year. The top line, however, missed the Zacks Consensus Estimate by 1.3%. RLI’s net investment income increased 19.2% year over year to $21.3 million.
An Upcoming Release
Horace Mann Educators Corporation (HMN - Free Report) is slated to release third-quarter 2022 results on Nov 3. The Zacks Consensus Estimate for HMN’s third-quarter earnings is pegged at 59 cents per share, indicating an increase of 18% from the year-ago quarter’s reported figure.
Horace Mann’s earnings beat estimates in three of the last four quarters and missed the mark once, the average surprise being 26.32%.
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Marsh & McLennan (MMC) Q3 Earnings Beat, Revenues Rise Y/Y
Marsh & McLennan Companies, Inc. (MMC - Free Report) reported third-quarter 2022 adjusted earnings per share of $1.18, which outpaced the Zacks Consensus Estimate by 1.7%. The bottom line rose 9% year over year.
Consolidated revenues of MMC amounted to $4.8 billion, which grew 4% year over year in the quarter under review but fell short of the consensus mark by 1.7%.
Solid performances of the Risk and Insurance Services, and Consulting segments drove the quarterly results of Marsh & McLennan. The quarter witnessed an adjusted operating margin expansion of 110 basis points year over year. However, elevated compensation and benefits expense partially offset the margins.
Total expenses increased 3.5% year over year to $4 billion in the third quarter due to higher compensation and benefits, and other operating expenses. While total expenses at the Risk and Insurance Services segment rose 1.9% year over year, the same at the Consulting segment witnessed a 5.3% year-over-year rise.
Consolidated adjusted operating income of $851 million climbed 12% year over year.
Marsh & McLennan Companies, Inc. Price, Consensus and EPS Surprise
Marsh & McLennan Companies, Inc. price-consensus-eps-surprise-chart | Marsh & McLennan Companies, Inc. Quote
Segmental Results
Risk and Insurance Services
The segment’ revenues of $2.8 billion rose 9% on an underlying basis in the third quarter but fell short of the Zacks Consensus Estimate of $2.9 billion. The adjusted operating income of $562 million climbed 20% year over year and surpassed the consensus mark of $503 million.
Revenues of Marsh, a unit within the segment, came in at $2.5 billion. The figure improved 8% on an underlying basis. In the United States/Canada, underlying revenues grew 5% year over year. International operations generated revenue growth of 11% on an underlying basis. Among the international operations, Latin America recorded highest revenue growth of 15%, followed by increases of 14% and 9% in the Asia Pacific and EMEA, respectively.
Revenues of Guy Carpenter, another unit under the Risk and Insurance Services segment, witnessed a 7% increase on an underlying basis to $328 million.
Consulting
The segment generated revenues of $2 billion, up 8% on an underlying basis. The adjusted operating income advanced 3% year over year to $362 million in the third quarter but lagged the consensus mark of $385 million.
A unit within this segment, Mercer reported revenues of $1.3 billion. The figure improved 5% on an underlying basis. Career and Health revenues climbed 15% and 10%, respectively, on an underlying basis. However, the same at Wealth dipped 1% on an underlying basis.
Oliver Wyman, another unit under the Consulting segment, recorded revenues of $667 million, up 13% on an underlying basis in the quarter under review.
Financial Update (as of Sep 30, 2022)
Marsh & McLennan exited the third quarter with cash and cash equivalents of $802 million, which dropped 54.2% from the figure at 2021 end. Total assets of $32 billion declined 6.9% from the level as of Dec 31, 2021.
Long-term debt amounted to $10.4 billion, down 4.9% from the 2021-end level. Short-term debt came in at $967 million, which increased nearly 57-fold from the figure at 2021 end.
Total equity declined 12.8% from the 2021-end level to $9.8 billion.
During the nine months ended Sep 30, 2022, MMC’s net cash provided by operating activities came in at nearly $2 billion. The metric decreased 5.4% from the prior-year comparable period’s level.
Capital Deployment Update
Marsh & McLennan bought back 3.1 million shares worth $500 million in the third quarter.
In September 2022, management sanctioned a quarterly dividend of 59 cents per share, which will be paid out on Nov 15, 2022, to its shareholders of record as of Oct 7.
Zacks Rank
Marsh & McLennan currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performances of Some Other Insurers
Of the insurance industry players that have reported third-quarter results so far, The Travelers Companies, Inc. (TRV - Free Report) and RLI Corp. (RLI - Free Report) beat the respective Zacks Consensus Estimate for earnings.
Travelers reported third-quarter 2022 core income of $2.20 per share, which beat the Zacks Consensus Estimate by 24.3%. The bottom line, however, decreased 15.4% year over year. TRV’s total revenues increased 6.8% from the year-ago quarter’s level to $9.4 billion, primarily on higher premiums and fee income. The top-line figure beat the Zacks Consensus Estimate by 2.5%. Net written premiums increased 110% year over year to $9.2 billion.
RLI’s operating earnings of 50 cents per share beat the Zacks Consensus Estimate by 51.5% but declined 23.1% from the prior-year quarter’s level. Operating revenues of RLI were $312.7 million, up 15.3% year over year. The top line, however, missed the Zacks Consensus Estimate by 1.3%. RLI’s net investment income increased 19.2% year over year to $21.3 million.
An Upcoming Release
Horace Mann Educators Corporation (HMN - Free Report) is slated to release third-quarter 2022 results on Nov 3. The Zacks Consensus Estimate for HMN’s third-quarter earnings is pegged at 59 cents per share, indicating an increase of 18% from the year-ago quarter’s reported figure.
Horace Mann’s earnings beat estimates in three of the last four quarters and missed the mark once, the average surprise being 26.32%.