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Will Marsh & McLennan (MMC) Stock Disappoint in Q1 Earnings?
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Marsh & McLennan Companies, Inc. (MMC - Free Report) is scheduled to report first-quarter 2017 earnings results on Apr 27, before the opening bell.
Last quarter, Marsh & McLennan reported in line with the Zacks Consensus Estimate. Let’s see how things are shaping up for this announcement.
Factors Influencing Q1 Results
The synergistic effect of a number of acquisitions made by the company over the past many quarters will lead to revenue accretion. Acquisitions are an important part of the company’s balanced capital allocation strategy.
Top-line growth will likely be fueled by the company’s recent growth efforts. Some of these include – expansion in Latin America, Asia, the Middle East and South Africa, Marsh’s buildout of MMA and its UK SME strategy, the emergence of cyber, flood and mortgage practices at Marsh and Guy Carpenter, investments at Mercer in Workday implementation capabilities, global health and benefits technology and the Mercer Marketplace Health Exchange, investments in Oliver Wyman and their digital technology and analytics platform, and continued pursuit of high-growth areas, including healthcare and public sector.
In the previous quarter, the company incurred a restructuring charge of $33 million. The company had at that time announced its expectation of incurring additional restructuring charges of approximately $10 million in the first half of 2017. A part of this charge might be allocated to the first quarter.
Also, foreign exchange movement might have a slight negative impact on earnings.
Earnings Whispers
Our proven model does not conclusively show that Marsh & McLennan is likely to beat on earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here as you will see below.
Zacks ESP: Marsh & McLennan has an Earnings ESP of -1.01%. This is because the Most Accurate estimate is 98 cents per share, a penny below the Zacks Consensus Estimate of 99 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Marsh & McLennan Companies, Inc. Price and EPS Surprise
Zacks Rank: Marsh & McLennan carries a Zacks Rank #3 (Hold) which decreases the predictive power of ESP. We caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks That Warrant a Look
Here are some companies that you may consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Selective Insurance Group, Inc. (SIGI - Free Report) has an Earnings ESP of +9.59% and a Zacks Rank #2. The company will report first-quarter earnings results on Apr 26.
Fiserv, Inc. has an Earnings ESP of +0.85% and a Zacks Rank #2. The company is expected to report first-quarter earnings results on Apr 26.
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Will Marsh & McLennan (MMC) Stock Disappoint in Q1 Earnings?
Marsh & McLennan Companies, Inc. (MMC - Free Report) is scheduled to report first-quarter 2017 earnings results on Apr 27, before the opening bell.
Last quarter, Marsh & McLennan reported in line with the Zacks Consensus Estimate. Let’s see how things are shaping up for this announcement.
Factors Influencing Q1 Results
The synergistic effect of a number of acquisitions made by the company over the past many quarters will lead to revenue accretion. Acquisitions are an important part of the company’s balanced capital allocation strategy.
Top-line growth will likely be fueled by the company’s recent growth efforts. Some of these include – expansion in Latin America, Asia, the Middle East and South Africa, Marsh’s buildout of MMA and its UK SME strategy, the emergence of cyber, flood and mortgage practices at Marsh and Guy Carpenter, investments at Mercer in Workday implementation capabilities, global health and benefits technology and the Mercer Marketplace Health Exchange, investments in Oliver Wyman and their digital technology and analytics platform, and continued pursuit of high-growth areas, including healthcare and public sector.
In the previous quarter, the company incurred a restructuring charge of $33 million. The company had at that time announced its expectation of incurring additional restructuring charges of approximately $10 million in the first half of 2017. A part of this charge might be allocated to the first quarter.
Also, foreign exchange movement might have a slight negative impact on earnings.
Earnings Whispers
Our proven model does not conclusively show that Marsh & McLennan is likely to beat on earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here as you will see below.
Zacks ESP: Marsh & McLennan has an Earnings ESP of -1.01%. This is because the Most Accurate estimate is 98 cents per share, a penny below the Zacks Consensus Estimate of 99 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Marsh & McLennan Companies, Inc. Price and EPS Surprise
Marsh & McLennan Companies, Inc. Price and EPS Surprise | Marsh & McLennan Companies, Inc. Quote
Zacks Rank: Marsh & McLennan carries a Zacks Rank #3 (Hold) which decreases the predictive power of ESP. We caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks That Warrant a Look
Here are some companies that you may consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Anthem Inc. , which will report first-quarter earnings results on Apr 26, has an Earnings ESP of +7.797% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Selective Insurance Group, Inc. (SIGI - Free Report) has an Earnings ESP of +9.59% and a Zacks Rank #2. The company will report first-quarter earnings results on Apr 26.
Fiserv, Inc. has an Earnings ESP of +0.85% and a Zacks Rank #2. The company is expected to report first-quarter earnings results on Apr 26.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere
1 billion iPhones in 10 years but a new breakthrough is expected to generate more
than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging
phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.Click here for the 6 trades >>