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Willis Towers (WLTW) Beats on Q4 Earnings, Raises Dividend
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Willis Towers Watson plc reported fourth-quarter 2016 adjusted net income of $1.88 per share that beat the Zacks Consensus Estimate of $1.61 by 16.8%. Earnings also surged 41% year over year.
Including amortization, restructuring costs as well as integration and transaction expenses, net income came in at 25 cents per share. The company had incurred a loss of 35 cents per share in the year-ago quarter.
Operational Updates
Adjusted revenues improved 0.3% (up 4% on a constant currency basis, up 1% on an organic basis) year over year to $1.93 billion. Revenues narrowly missed the Zacks Consensus Estimate of $1.94 billion.
Commissions and fees were $1.9 billion, flat year over year.
Income from operations decreased 33% year over year to $88 million in the quarter.
Adjusted EBITDA was $419 million or 21.7% of adjusted revenues. The reported figure was higher than $192 million, or 19.7% of revenues, in the year-earlier quarter.
2016 Highlights
Adjusted earnings came in at $7.96 per share, up 13.2% year over year. Adjusted revenues of $7.9 billion skyrocketed 107% from 2016.
Quarterly Segment Update
Human Capital & Benefits: Commissions and fees of $751 million were down 4% year over year (flat on a constant currency basis and 2% lower on an organic basis). Total revenue of $759 million was down 2.6%. Operating margin was 20%.
Corporate Risk & Broking: Commissions and fees of $695 million improved 2% (up 6% on a constant currency but flat on an organic basis) year over year. Total revenue of $703 million climbed 2.9% year over year. Operating margin was 32% in the quarter.
Investment, Risk & Reinsurance: Commissions and fees of $260 million declined 9% (down 3% on both constant currency and organic basis). Total revenues of $264 million declined 8% from the prior-year quarter. Operating margin was 1%.
Exchange Solutions: Commission and fees of $174 million improved 21% (up 21% on both constant currency and organic basis). Total revenue of $175 million jumped 21% year over year. Operating margin was 8%.
Share Repurchase and Dividend Update
Willis Towers Watson bought back $400 million worth of shares in 2016.
The board of directors approved a 10% increase in dividend to 53 cents per share.
2017 Guidance
Willis Towers Watson expects adjusted earnings per share between $8.40 and $8.55 in 2017. Constant currency revenue growth is estimated in the range of 2% to 3%.
Zacks Rank
Willis Towers presently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Willis Towers Watson Public Limited Company Price, Consensus and EPS Surprise
Among the other insurers that have reported their fourth-quarter earnings so far, the bottom line at Progressive Corp. (PGR - Free Report) , The Travelers Companies Inc. (TRV - Free Report) and RLI Corp. (RLI - Free Report) beat the Zacks Consensus Estimate.
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Willis Towers (WLTW) Beats on Q4 Earnings, Raises Dividend
Willis Towers Watson plc reported fourth-quarter 2016 adjusted net income of $1.88 per share that beat the Zacks Consensus Estimate of $1.61 by 16.8%. Earnings also surged 41% year over year.
Including amortization, restructuring costs as well as integration and transaction expenses, net income came in at 25 cents per share. The company had incurred a loss of 35 cents per share in the year-ago quarter.
Operational Updates
Adjusted revenues improved 0.3% (up 4% on a constant currency basis, up 1% on an organic basis) year over year to $1.93 billion. Revenues narrowly missed the Zacks Consensus Estimate of $1.94 billion.
Commissions and fees were $1.9 billion, flat year over year.
Income from operations decreased 33% year over year to $88 million in the quarter.
Adjusted EBITDA was $419 million or 21.7% of adjusted revenues. The reported figure was higher than $192 million, or 19.7% of revenues, in the year-earlier quarter.
2016 Highlights
Adjusted earnings came in at $7.96 per share, up 13.2% year over year. Adjusted revenues of $7.9 billion skyrocketed 107% from 2016.
Quarterly Segment Update
Human Capital & Benefits: Commissions and fees of $751 million were down 4% year over year (flat on a constant currency basis and 2% lower on an organic basis). Total revenue of $759 million was down 2.6%. Operating margin was 20%.
Corporate Risk & Broking: Commissions and fees of $695 million improved 2% (up 6% on a constant currency but flat on an organic basis) year over year. Total revenue of $703 million climbed 2.9% year over year. Operating margin was 32% in the quarter.
Investment, Risk & Reinsurance: Commissions and fees of $260 million declined 9% (down 3% on both constant currency and organic basis). Total revenues of $264 million declined 8% from the prior-year quarter. Operating margin was 1%.
Exchange Solutions: Commission and fees of $174 million improved 21% (up 21% on both constant currency and organic basis). Total revenue of $175 million jumped 21% year over year. Operating margin was 8%.
Share Repurchase and Dividend Update
Willis Towers Watson bought back $400 million worth of shares in 2016.
The board of directors approved a 10% increase in dividend to 53 cents per share.
2017 Guidance
Willis Towers Watson expects adjusted earnings per share between $8.40 and $8.55 in 2017. Constant currency revenue growth is estimated in the range of 2% to 3%.
Zacks Rank
Willis Towers presently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Willis Towers Watson Public Limited Company Price, Consensus and EPS Surprise
Willis Towers Watson Public Limited Company Price, Consensus and EPS Surprise | Willis Towers Watson Public Limited Company Quote
Performance of Other Insurers
Among the other insurers that have reported their fourth-quarter earnings so far, the bottom line at Progressive Corp. (PGR - Free Report) , The Travelers Companies Inc. (TRV - Free Report) and RLI Corp. (RLI - Free Report) beat the Zacks Consensus Estimate.
Zacks' Top 10 Stocks for 2017In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017? Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them >>