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Marsh & McLennan (MMC) Up 1.6% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for Marsh & McLennan (MMC - Free Report) . Shares have added about 1.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Marsh & McLennan due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Marsh & McLennan's Q1 Earnings Beat Estimates, Up Y/Y
Marsh & McLennan delivered first-quarter 2019 adjusted earnings per share of $1.52, surpassing the Zacks Consensus Estimate by 4.8%. Also, the bottom line improved 10.1% year over year.
Moreover, Marsh & McLennan’s consolidated revenues were $4.1 billion, up 4% on an underlying basis. This upside is majorly attributable to the Risk and Insurances Services plus Consulting Segments. However, the top line missed the Zacks Consensus Estimate by 3.1%.
Total operating expenses of $3.1 billion in the first quarter inched up 1.3% year over year due to high compensation and benefits.
Quarterly Segment Results
Risk and Insurance Services
Revenues at the Risk and Insurance Services segment were $2.4 billion, up 5% on an underlying basis. Adjusted operating income increased 7% to $775 million from the prior-year quarter’s level.
Marsh, a unit within this segment, generated revenues of $1.7 billion, up 5% on an underlying basis. In U.S./Canada, underlying revenues rose 5%. Underlying revenue growth from international operations of 5% includes 8% of the metric in Asia Pacific, 3% in EMEA and 11% in Latin America.
Another unit under this segment — Guy Carpenter — displayed 6% revenue growth on an underlying basis.
Consulting
The Consulting segment's revenues rose 2% on an underlying basis to $1.7 billion. Also, adjusted operating income increased 18% year over year to $291 million.
A unit within this segment — Mercer — reported revenues of $1.2 billion, flat on an underlying basis. Wealth’s revenues dipped 1% on an underlying basis.
Another unit, Oliver Wyman Group, registered revenues of $518 million, up 7% on an underlying basis
Acquisition Update
The company completed the buyout of Jardine Lloyd Thompson Group (JLT) for $5.6 billion on Apr 1, 2019.
It also closed the acquisition of Clearwater, FL-based Bouchard Insurance Inc. in February and announced the purchase of Phoenix, AZ-based Lovitt& Touché Inc in April.
Financial Update
Marsh & McLennan exited the quarter with cash and cash equivalents of nearly $1.1 billion, up 4.8% from the figure at 2018 end.
Cash outflow for operations totaled $276 million, down 24.2% year over year.
As of Mar 31, 2018, Marsh & McLennan’s total assets were $30.1 billion, up 40% from the tally as of Dec 31, 2018.
Total equity was $7.9 billion, up 5.3% from the level at year-end 2018.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
VGM Scores
Currently, Marsh & McLennan has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Marsh & McLennan has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Marsh & McLennan (MMC) Up 1.6% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Marsh & McLennan (MMC - Free Report) . Shares have added about 1.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Marsh & McLennan due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Marsh & McLennan's Q1 Earnings Beat Estimates, Up Y/Y
Marsh & McLennan delivered first-quarter 2019 adjusted earnings per share of $1.52, surpassing the Zacks Consensus Estimate by 4.8%. Also, the bottom line improved 10.1% year over year.
Moreover, Marsh & McLennan’s consolidated revenues were $4.1 billion, up 4% on an underlying basis. This upside is majorly attributable to the Risk and Insurances Services plus Consulting Segments. However, the top line missed the Zacks Consensus Estimate by 3.1%.
Total operating expenses of $3.1 billion in the first quarter inched up 1.3% year over year due to high compensation and benefits.
Quarterly Segment Results
Risk and Insurance Services
Revenues at the Risk and Insurance Services segment were $2.4 billion, up 5% on an underlying basis. Adjusted operating income increased 7% to $775 million from the prior-year quarter’s level.
Marsh, a unit within this segment, generated revenues of $1.7 billion, up 5% on an underlying basis. In U.S./Canada, underlying revenues rose 5%. Underlying revenue growth from international operations of 5% includes 8% of the metric in Asia Pacific, 3% in EMEA and 11% in Latin America.
Another unit under this segment — Guy Carpenter — displayed 6% revenue growth on an underlying basis.
Consulting
The Consulting segment's revenues rose 2% on an underlying basis to $1.7 billion. Also, adjusted operating income increased 18% year over year to $291 million.
A unit within this segment — Mercer — reported revenues of $1.2 billion, flat on an underlying basis. Wealth’s revenues dipped 1% on an underlying basis.
Another unit, Oliver Wyman Group, registered revenues of $518 million, up 7% on an underlying basis
Acquisition Update
The company completed the buyout of Jardine Lloyd Thompson Group (JLT) for $5.6 billion on Apr 1, 2019.
It also closed the acquisition of Clearwater, FL-based Bouchard Insurance Inc. in February and announced the purchase of Phoenix, AZ-based Lovitt& Touché Inc in April.
Financial Update
Marsh & McLennan exited the quarter with cash and cash equivalents of nearly $1.1 billion, up 4.8% from the figure at 2018 end.
Cash outflow for operations totaled $276 million, down 24.2% year over year.
As of Mar 31, 2018, Marsh & McLennan’s total assets were $30.1 billion, up 40% from the tally as of Dec 31, 2018.
Total equity was $7.9 billion, up 5.3% from the level at year-end 2018.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
VGM Scores
Currently, Marsh & McLennan has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Marsh & McLennan has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.