Marsh& McLennan Companies, Inc. (MMC - Free Report) delivered second-quarter 2021 adjusted earnings per share of $1.75, surpassing the Zacks Consensus of Estimate by 23.2%. This upside is owing to a solid contribution from its Risk and Insurance Services as well as Consulting segments. The bottom line also improved 32.6% from the year-ago quarter’s level.
Marsh & McLennan’s consolidated revenues of $5 billion were up 20% year over year. The top line too beat the Zacks Consensus Estimate by 12.9% on the back of its strong Risk and Insurance Services as well as Consulting segments.
Total operating expenses of $3.7 billion in the second quarter were up 14.7% year over year due to higher compensation and benefits.
Quarterly Segmental Results
Risk and Insurance Services
Revenues were $3.1 billion, up 13% on an underlying basis. Adjusted operating income improved 22% to $927 million from the prior-year quarter’s level.
Marsh, a unit within this segment, generated revenues worth $2.7 billion, up 14% on an underlying basis. In the U.S./Canada, underlying revenues rose 15% year over year.
Underlying revenues from international operations rose 13% year over year including a 10% increase of the same in the Asia Pacific, a 2% rise in Latin America and a 16% hike in EMEA.
Revenues from another unit under this segment, Guy Carpenter were up 12% year over year on an underlying basis in the quarter under review.
Consulting
Revenues were up 12% on an underlying basis to $1.9 billion. Adjusted operating income surged 34% to $356 million as well.
A unit within this segment, Mercer, generated revenues of $1.3 billion, climbing 6% on an underlying basis. Wealth’s revenues inched up 4% on an underlying basis. Health’s revenues were up 4% year over year while the same at Career was up 15% on an underlying basis. Another unit Oliver Wyman Group registered revenues worth $618 million, up 28% year over year on an underlying basis.
Share Repurchase Update
The company bought back shares worth $322 million in the quarter under review.
Its board of directors hiked the quarterly dividend by 15% to 53.5 cents per share.
Financial Update
Marsh & McLennan exited the second quarter with cash and cash equivalents of $888 million, down 57.1% from the level at 2020 end.
Net cash used for operations stood at $750 million at the end of the first six months of 2021, 29.8% above the year-ago quarter’s value.
As of Jun 30, 2021, Marsh & McLennan’s total assets were $32.9 billion, down 0.3% from the figure as of Dec 31, 2020.
Total equity was $10.2 billion, up 10.8% from the level at 2020 end.
Zacks Rank and Performance of Other Players
Marsh & McLennan carries a Zacks Rank #3 (Hold), currently. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Among other insurance industry players, which have reported second-quarter earnings so far, the bottom-line results of The Progressive Corporation (PGR - Free Report) , RLI Corp. (RLI - Free Report) and The Travelers Companies, Inc. (TRV - Free Report) beat the respective Zacks Consensus Estimate.
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Marsh& McLennan Companies, Inc. (MMC - Free Report) delivered second-quarter 2021 adjusted earnings per share of $1.75, surpassing the Zacks Consensus of Estimate by 23.2%. This upside is owing to a solid contribution from its Risk and Insurance Services as well as Consulting segments. The bottom line also improved 32.6% from the year-ago quarter’s level.
Marsh & McLennan’s consolidated revenues of $5 billion were up 20% year over year. The top line too beat the Zacks Consensus Estimate by 12.9% on the back of its strong Risk and Insurance Services as well as Consulting segments.
Total operating expenses of $3.7 billion in the second quarter were up 14.7% year over year due to higher compensation and benefits.
Quarterly Segmental Results
Risk and Insurance Services
Revenues were $3.1 billion, up 13% on an underlying basis. Adjusted operating income improved 22% to $927 million from the prior-year quarter’s level.
Marsh, a unit within this segment, generated revenues worth $2.7 billion, up 14% on an underlying basis. In the U.S./Canada, underlying revenues rose 15% year over year.
Underlying revenues from international operations rose 13% year over year including a 10% increase of the same in the Asia Pacific, a 2% rise in Latin America and a 16% hike in EMEA.
Revenues from another unit under this segment, Guy Carpenter were up 12% year over year on an underlying basis in the quarter under review.
Consulting
Revenues were up 12% on an underlying basis to $1.9 billion. Adjusted operating income surged 34% to $356 million as well.
A unit within this segment, Mercer, generated revenues of $1.3 billion, climbing 6% on an underlying basis. Wealth’s revenues inched up 4% on an underlying basis. Health’s revenues were up 4% year over year while the same at Career was up 15% on an underlying basis. Another unit Oliver Wyman Group registered revenues worth $618 million, up 28% year over year on an underlying basis.
Share Repurchase Update
The company bought back shares worth $322 million in the quarter under review.
Its board of directors hiked the quarterly dividend by 15% to 53.5 cents per share.
Financial Update
Marsh & McLennan exited the second quarter with cash and cash equivalents of $888 million, down 57.1% from the level at 2020 end.
Net cash used for operations stood at $750 million at the end of the first six months of 2021, 29.8% above the year-ago quarter’s value.
As of Jun 30, 2021, Marsh & McLennan’s total assets were $32.9 billion, down 0.3% from the figure as of Dec 31, 2020.
Total equity was $10.2 billion, up 10.8% from the level at 2020 end.
Zacks Rank and Performance of Other Players
Marsh & McLennan carries a Zacks Rank #3 (Hold), currently. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Among other insurance industry players, which have reported second-quarter earnings so far, the bottom-line results of The Progressive Corporation (PGR - Free Report) , RLI Corp. (RLI - Free Report) and The Travelers Companies, Inc. (TRV - Free Report) beat the respective Zacks Consensus Estimate.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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