Willis Towers Watson plc reported second-quarter 2016 adjusted net income of $1.66 per share, beating the Zacks Consensus Estimate of $1.59. Earnings declined 1.2% year over year.
Including restructuring costs and integration expenses, net income came in at 51 cents, down 49% year over year.
Operational Updates
Adjusted revenues improved 9% (11% constant currency growth, 5% organic growth), year over year to $1.98 billion. Revenues missed the Zacks Consensus Estimate of $2 billion.
On a year-over-year basis, commissions, fees increased 7% to $1.9 billion
Adjusted operating income decreased 20% year over year to $136 million.
Adjusted EBITDA was $406 million, or 20.6% of adjusted revenues, higher than $401 million, or 22.1% of revenues in the year-ago quarter.
Quarterly Segment Update
Human Capital & Benefits: Commissions and fees of $760 million declined 1% year over year (3% on constant currency basis and flat on an organic basis). Total revenues of $765 million increased 1.3%. Operating margin was 15%.
Corporate Risk & Broking: Commissions and fees of $623 million improved 7% (9% constant currency growth and 1% organic increase). Total revenues of $629 million improved 7.5% year over year. Operating margin was 19% in the quarter.
Investment, Risk & Reinsurance: Commissions and fees of $355 million improved 5% (7% constant currency growth but 5% organic decline). Total revenues of $155 million increased 17.7% over the prior-year quarter. Operating margin was 25%.
Exchange Solutions: Commission and fees of $154 million improved 47% (47% constant currency growth but 43% organic decrease). Total revenues of $155 million were up 46% year over year. Operating margin was 20%.
Share Repurchase
The company has bought back $100 million worth shares year to date and envisions repurchasing $200 million in the remainder of the year.
2016 Guidance
Willis Towers Watson projects adjusted earnings per share between $7.60 and $7.80, down from $7.70 and $7.95. Reported earnings per share are expected between $2.48 and $2.68.
Constant currency revenue growth is expected 10% while reported revenue growth is estimated at 7%.
Zacks Rank
Willis Towers presently carries a Zacks Rank #3 (Hold).
Performance of Other Insurance Brokers
The bottom line at Marsh & McLennan Companies, Inc. (MMC - Free Report) was in line with the Zacks Consensus Estimate while Brown & Brown Inc. (BRO - Free Report) beat the same. Aon plc (AON - Free Report) missed out expectation in the second quarter.
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Willis Towers Watson plc reported second-quarter 2016 adjusted net income of $1.66 per share, beating the Zacks Consensus Estimate of $1.59. Earnings declined 1.2% year over year.
Including restructuring costs and integration expenses, net income came in at 51 cents, down 49% year over year.
Operational Updates
Adjusted revenues improved 9% (11% constant currency growth, 5% organic growth), year over year to $1.98 billion. Revenues missed the Zacks Consensus Estimate of $2 billion.
On a year-over-year basis, commissions, fees increased 7% to $1.9 billion
Adjusted operating income decreased 20% year over year to $136 million.
Adjusted EBITDA was $406 million, or 20.6% of adjusted revenues, higher than $401 million, or 22.1% of revenues in the year-ago quarter.
Quarterly Segment Update
Human Capital & Benefits: Commissions and fees of $760 million declined 1% year over year (3% on constant currency basis and flat on an organic basis). Total revenues of $765 million increased 1.3%. Operating margin was 15%.
Corporate Risk & Broking: Commissions and fees of $623 million improved 7% (9% constant currency growth and 1% organic increase). Total revenues of $629 million improved 7.5% year over year. Operating margin was 19% in the quarter.
Investment, Risk & Reinsurance: Commissions and fees of $355 million improved 5% (7% constant currency growth but 5% organic decline). Total revenues of $155 million increased 17.7% over the prior-year quarter. Operating margin was 25%.
Exchange Solutions: Commission and fees of $154 million improved 47% (47% constant currency growth but 43% organic decrease). Total revenues of $155 million were up 46% year over year. Operating margin was 20%.
Share Repurchase
The company has bought back $100 million worth shares year to date and envisions repurchasing $200 million in the remainder of the year.
2016 Guidance
Willis Towers Watson projects adjusted earnings per share between $7.60 and $7.80, down from $7.70 and $7.95. Reported earnings per share are expected between $2.48 and $2.68.
Constant currency revenue growth is expected 10% while reported revenue growth is estimated at 7%.
Zacks Rank
Willis Towers presently carries a Zacks Rank #3 (Hold).
Performance of Other Insurance Brokers
The bottom line at Marsh & McLennan Companies, Inc. (MMC - Free Report) was in line with the Zacks Consensus Estimate while Brown & Brown Inc. (BRO - Free Report) beat the same. Aon plc (AON - Free Report) missed out expectation in the second quarter.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
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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