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Marsh & McLennan's (MMC) Q3 Earnings Top Estimates, Rise Y/Y
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Marsh & McLennan Companies, Inc. (MMC - Free Report) delivered third-quarter 2020 adjusted earnings per share of 82 cents, surpassing the Zacks Consensus Estimate by 19% on reduced expenses and a solid contribution from its Risk and Insurance Services segment. Moreover, the bottom line increased 6.5% year over year.
Marsh & McLennan’s consolidated revenues of $4 billion were flat with the prior-year quarter. However, the top line beat the Zacks Consensus Estimate by 3.5% on the back of its strong Risk and Insurance Services segment.
Total operating expenses of $3.4 billion in the third quarter were down 2.1% year over year owing to lower other operating expenses.
Marsh McLennan Companies, Inc. Price, Consensus and EPS Surprise
Revenues at the Risk and Insurance Services segment were $2.3 billion, up 2% on an underlying basis. Adjusted operating income rose 24% to $388 million from the prior-year quarter’s level.
Marsh, a unit within this segment, generated revenues of $2 billion, up 3% on an underlying basis. In the U.S./Canada, underlying revenues rose 5% year over year.
Underlying revenues from international operations were up 2% year over year, including a 4% increase of the same in the Asia Pacific, a 2% rise in Latin America and flat revenues in EMEA.
Another unit under this segment, Guy Carpenter’s revenues were flat year over year on an underlying basis in the quarter under review.
Consulting
The Consulting segment's revenues were down 4% on an underlying basis to $1.7 billion. Also, adjusted operating income fell 5% to $306 million.
A unit within this segment, Mercer, generated revenues of $1.2 billion, down 3% on an underlying basis. Wealth’s revenues dipped 3% on an underlying basis. Health and Career’s revenues were flat and down 11%, respectively, year over year on an underlying basis.
Another unit Oliver Wyman Group registered revenues of $480 million, down 6% year over year on an underlying basis.
Financial Update
Marsh & McLennan exited the third quarter with cash and cash equivalents of $2.4 billion, up 106.8% from the level at 2019 end.
Net cash provided by operating activities totaled $1.9 billion at the end of the third quarter, up 54.8% year over year.
As of Sep 30, 2020, Marsh & McLennan’s total assets were $32.7 billion, up 4.5% from the figure as of Dec 31, 2019.
Total equity was $8.8 billion, up 11.2% from the level at 2019 end.
Of the insurance industry players, which reported third-quarter results so far, earnings of Cincinnati Financial Corporation (CINF - Free Report) and First American Financial Corporation (FAF - Free Report) missed the respective Zacks Consensus Estimate while that of RLI Corp. (RLI - Free Report) beat the same.
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Marsh & McLennan's (MMC) Q3 Earnings Top Estimates, Rise Y/Y
Marsh & McLennan Companies, Inc. (MMC - Free Report) delivered third-quarter 2020 adjusted earnings per share of 82 cents, surpassing the Zacks Consensus Estimate by 19% on reduced expenses and a solid contribution from its Risk and Insurance Services segment. Moreover, the bottom line increased 6.5% year over year.
Marsh & McLennan’s consolidated revenues of $4 billion were flat with the prior-year quarter. However, the top line beat the Zacks Consensus Estimate by 3.5% on the back of its strong Risk and Insurance Services segment.
Total operating expenses of $3.4 billion in the third quarter were down 2.1% year over year owing to lower other operating expenses.
Marsh McLennan Companies, Inc. Price, Consensus and EPS Surprise
Marsh McLennan Companies, Inc. price-consensus-eps-surprise-chart | Marsh McLennan Companies, Inc. Quote
Quarterly Segmental Results
Risk and Insurance Services
Revenues at the Risk and Insurance Services segment were $2.3 billion, up 2% on an underlying basis. Adjusted operating income rose 24% to $388 million from the prior-year quarter’s level.
Marsh, a unit within this segment, generated revenues of $2 billion, up 3% on an underlying basis. In the U.S./Canada, underlying revenues rose 5% year over year.
Underlying revenues from international operations were up 2% year over year, including a 4% increase of the same in the Asia Pacific, a 2% rise in Latin America and flat revenues in EMEA.
Another unit under this segment, Guy Carpenter’s revenues were flat year over year on an underlying basis in the quarter under review.
Consulting
The Consulting segment's revenues were down 4% on an underlying basis to $1.7 billion. Also, adjusted operating income fell 5% to $306 million.
A unit within this segment, Mercer, generated revenues of $1.2 billion, down 3% on an underlying basis. Wealth’s revenues dipped 3% on an underlying basis. Health and Career’s revenues were flat and down 11%, respectively, year over year on an underlying basis.
Another unit Oliver Wyman Group registered revenues of $480 million, down 6% year over year on an underlying basis.
Financial Update
Marsh & McLennan exited the third quarter with cash and cash equivalents of $2.4 billion, up 106.8% from the level at 2019 end.
Net cash provided by operating activities totaled $1.9 billion at the end of the third quarter, up 54.8% year over year.
As of Sep 30, 2020, Marsh & McLennan’s total assets were $32.7 billion, up 4.5% from the figure as of Dec 31, 2019.
Total equity was $8.8 billion, up 11.2% from the level at 2019 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.
Of the insurance industry players, which reported third-quarter results so far, earnings of Cincinnati Financial Corporation (CINF - Free Report) and First American Financial Corporation (FAF - Free Report) missed the respective Zacks Consensus Estimate while that of RLI Corp. (RLI - Free Report) beat the same.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by referendums and legislation, this industry is expected to blast from an already robust $17.7 billion in 2019 to a staggering $73.6 billion by 2027. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot stocks we're targeting >>