Marsh & McLennan Companies, Inc. (MMC - Free Report) delivered second-quarter 2019 adjusted earnings per share of $1.18, surpassing the Zacks Consensus Estimate by 4.4% on the back of higher revenues. Also, the bottom line improved 7.3% year over year.
Moreover, Marsh & McLennan’s consolidated revenues were $4.3 billion, up 16% on an underlying basis. This upside is majorly attributable to the Risk and Insurances Services plus Consulting Segments. Further, the top line slightly beat the Zacks Consensus Estimate by 0.3%.
Meanwhile, total operating expenses of $3.7 billion in the second quarter were up 20.6% year over year due to high compensation and benefits plus other operating expenses.
Quarterly Segmental Results
Risk and Insurance Services
Revenues at the Risk and Insurance Services segment were $2.6 billion, up 3% on an underlying basis. Adjusted operating income was up 21% to $641 million from the prior-year quarter’s level.
Marsh, a unit within this segment, generated revenues of $2.2 billion, up 4% on an underlying basis. In U.S./Canada, underlying revenues rose 5%. Underlying revenue growth from international operations includes 7% of the metric in Asia Pacific, flat in EMEA and 4% in Latin America.
Another unit under this segment — Guy Carpenter — displayed 3% revenue decline on an underlying basis to $392 million in the quarter under review.
Consulting
The Consulting segment's revenues rose 5% on an underlying basis. Also, adjusted operating income increased 14% year over year to $305 million.
A unit within this segment — Mercer — reported revenues of $1.3 billion, up 2% on an underlying basis. Wealth’s revenues were flat on an underlying basis.
Another unit, Oliver Wyman Group, registered revenues of $540 million, up 13% on an underlying basis.
Financial Update
Marsh & McLennan exited the quarter with cash and cash equivalents of nearly $1.3 billion, up 21.4% from the figure at 2018 end.
As of Jun 30, 2019, Marsh & McLennan’s total assets were $32.1 billion, up 49% from the tally at year-end 2018.
Total equity was $8.3 billion, up 10% from the level at year-end 2018.
Business Update
The company completed the pending buyout of Jardine Lloyd Thompson Group (JLT) in April 2019.
Share Repurchase and Dividend Update
The company bought back shares worth $100 million in the second quarter. In May, its board of directors also announced a 10% quarterly dividend hike effective the third quarter.
Zacks Rank
Marsh & McLennan carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Insurers
Of the insurance industry players that have already reported second-quarter results, the bottom-line figures of The Progressive Corporation (PGR - Free Report) and RLI Corp. (RLI - Free Report) beat the respective Zacks Consensus Estimate. However, The Travelers Companies, Inc.’s (TRV - Free Report) earnings missed the consensus mark.
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Marsh & McLennan Companies, Inc. (MMC - Free Report) delivered second-quarter 2019 adjusted earnings per share of $1.18, surpassing the Zacks Consensus Estimate by 4.4% on the back of higher revenues. Also, the bottom line improved 7.3% year over year.
Moreover, Marsh & McLennan’s consolidated revenues were $4.3 billion, up 16% on an underlying basis. This upside is majorly attributable to the Risk and Insurances Services plus Consulting Segments. Further, the top line slightly beat the Zacks Consensus Estimate by 0.3%.
Meanwhile, total operating expenses of $3.7 billion in the second quarter were up 20.6% year over year due to high compensation and benefits plus other operating expenses.
Quarterly Segmental Results
Risk and Insurance Services
Revenues at the Risk and Insurance Services segment were $2.6 billion, up 3% on an underlying basis. Adjusted operating income was up 21% to $641 million from the prior-year quarter’s level.
Marsh, a unit within this segment, generated revenues of $2.2 billion, up 4% on an underlying basis. In U.S./Canada, underlying revenues rose 5%. Underlying revenue growth from international operations includes 7% of the metric in Asia Pacific, flat in EMEA and 4% in Latin America.
Another unit under this segment — Guy Carpenter — displayed 3% revenue decline on an underlying basis to $392 million in the quarter under review.
Consulting
The Consulting segment's revenues rose 5% on an underlying basis. Also, adjusted operating income increased 14% year over year to $305 million.
A unit within this segment — Mercer — reported revenues of $1.3 billion, up 2% on an underlying basis. Wealth’s revenues were flat on an underlying basis.
Another unit, Oliver Wyman Group, registered revenues of $540 million, up 13% on an underlying basis.
Financial Update
Marsh & McLennan exited the quarter with cash and cash equivalents of nearly $1.3 billion, up 21.4% from the figure at 2018 end.
As of Jun 30, 2019, Marsh & McLennan’s total assets were $32.1 billion, up 49% from the tally at year-end 2018.
Total equity was $8.3 billion, up 10% from the level at year-end 2018.
Business Update
The company completed the pending buyout of Jardine Lloyd Thompson Group (JLT) in April 2019.
Share Repurchase and Dividend Update
The company bought back shares worth $100 million in the second quarter. In May, its board of directors also announced a 10% quarterly dividend hike effective the third quarter.
Zacks Rank
Marsh & McLennan carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Insurers
Of the insurance industry players that have already reported second-quarter results, the bottom-line figures of The Progressive Corporation (PGR - Free Report) and RLI Corp. (RLI - Free Report) beat the respective Zacks Consensus Estimate. However, The Travelers Companies, Inc.’s (TRV - Free Report) earnings missed the consensus mark.
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This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
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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.
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