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Willis Towers (WLTW) Beats Q1 Earnings and Revenue Estimates
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Willis Towers Watson plc reported first-quarter 2017 adjusted net income of $3.71 per share that beat the Zacks Consensus Estimate of $3.33. Earnings also increased 9% year over year.
Increase in revenues as well as lower expenses supported the upside.
Including amortization, restructuring costs as well as integration and transaction expenses, net income came in at $2.50 per share, up 43% year over year.
Operational Updates
Adjusted revenues improved 2% (up 5% on a constant currency basis as well as organic basis) year over year to $2.319 billion. Revenues narrowly beat the Zacks Consensus Estimate of $2.283 billion.
Commissions and fees were $2.3 billion, up 3.8% year over year.
Total costs of providing services decreased 2.7% year over year to $1.9 million.
Adjusted EBITDA of $708 million increased 5.5% year over year. Adjusted EBITDA margin expanded 90 basis points to 30.5%.
Adjusted operating income increased 5.4% year over year to $681 million in the quarter.
Willis Towers Watson Public Limited Company Price, Consensus and EPS Surprise
Human Capital & Benefits: Commissions and fees of $951 million were up 3% year over year (5% higher on constant currency basis as well as organic basis). Total revenue of $955 million was up 2.7%. Operating margin was 37%.
Corporate Risk & Broking: Commissions and fees of $650 million inched up 1% (3% higher on constant currency basis as well as organic basis) year over year. Total revenue of $655 million climbed 1.2% year over year. Operating margin was 19% in the quarter.
Investment, Risk & Reinsurance: Commissions and fees of $502 million were up 1% (5% higher on constant currency basis as well as organic basis). Total revenue of $507 million increased 1% from the prior-year quarter. Operating margin was 44%.
Exchange Solutions: Commission and fees of $179 million improved 10% (10% higher on constant currency basis as well as organic basis). Total revenue of $179 million jumped 10% year over year. Operating margin was 21%.
Financial Update
Cash and cash equivalents improved 3.6% to $901 million from the 2016-end level.
Long-term debt increased 18% from the 2016-end level to nearly $4 billion at the quarter end.
Shareholders equity increased 2.1% from the end of 2016 to $10.3 billion as of Mar 31, 2017.
Cash from operations declined 20% year over year to $95 million. Free cash flow was $33 million, down 54% year over year.
2017 Guidance
Willis Towers expects adjusted earnings per share between $8.40 and $8.55 in 2017. Constant currency revenue growth is estimated in the range of 2–3%.
Zacks Rank
Willis Towers presently carries a Zacks Rank #4 (Sell).
Among the other players that have reported first-quarter earnings so far, Chubb Limited (CB - Free Report) beat the Zacks Consensus Estimate but RLI Corp. (RLI - Free Report) and The Progressive Corporation (PGR - Free Report) missed expectations.
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Some are already reaching 265 miles on a single charge. With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
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Willis Towers (WLTW) Beats Q1 Earnings and Revenue Estimates
Willis Towers Watson plc reported first-quarter 2017 adjusted net income of $3.71 per share that beat the Zacks Consensus Estimate of $3.33. Earnings also increased 9% year over year.
Increase in revenues as well as lower expenses supported the upside.
Including amortization, restructuring costs as well as integration and transaction expenses, net income came in at $2.50 per share, up 43% year over year.
Operational Updates
Adjusted revenues improved 2% (up 5% on a constant currency basis as well as organic basis) year over year to $2.319 billion. Revenues narrowly beat the Zacks Consensus Estimate of $2.283 billion.
Commissions and fees were $2.3 billion, up 3.8% year over year.
Total costs of providing services decreased 2.7% year over year to $1.9 million.
Adjusted EBITDA of $708 million increased 5.5% year over year. Adjusted EBITDA margin expanded 90 basis points to 30.5%.
Adjusted operating income increased 5.4% year over year to $681 million in the quarter.
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
Quarterly Segment Update
Human Capital & Benefits: Commissions and fees of $951 million were up 3% year over year (5% higher on constant currency basis as well as organic basis). Total revenue of $955 million was up 2.7%. Operating margin was 37%.
Corporate Risk & Broking: Commissions and fees of $650 million inched up 1% (3% higher on constant currency basis as well as organic basis) year over year. Total revenue of $655 million climbed 1.2% year over year. Operating margin was 19% in the quarter.
Investment, Risk & Reinsurance: Commissions and fees of $502 million were up 1% (5% higher on constant currency basis as well as organic basis). Total revenue of $507 million increased 1% from the prior-year quarter. Operating margin was 44%.
Exchange Solutions: Commission and fees of $179 million improved 10% (10% higher on constant currency basis as well as organic basis). Total revenue of $179 million jumped 10% year over year. Operating margin was 21%.
Financial Update
Cash and cash equivalents improved 3.6% to $901 million from the 2016-end level.
Long-term debt increased 18% from the 2016-end level to nearly $4 billion at the quarter end.
Shareholders equity increased 2.1% from the end of 2016 to $10.3 billion as of Mar 31, 2017.
Cash from operations declined 20% year over year to $95 million. Free cash flow was $33 million, down 54% year over year.
2017 Guidance
Willis Towers expects adjusted earnings per share between $8.40 and $8.55 in 2017. Constant currency revenue growth is estimated in the range of 2–3%.
Zacks Rank
Willis Towers presently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Insurers
Among the other players that have reported first-quarter earnings so far, Chubb Limited (CB - Free Report) beat the Zacks Consensus Estimate but RLI Corp. (RLI - Free Report) and The Progressive Corporation (PGR - Free Report) missed expectations.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers.
Some are already reaching 265 miles on a single charge. With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
See This Ticker Free >>