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Willis Towers (WLTW) Q4 Earnings Top Estimates, Revenues Lag
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Willis Towers Watson Public Limited Company (WTW - Free Report) delivered fourth-quarter 2021 adjusted earnings of $5.67 per share, which beat the Zacks Consensus Estimate of $5.35. The bottom line improved 9% year over year.
WTW witnessed a solid performance of the Human Capital and Benefits (HCB) segment, Investment, Risk & Reinsurance, and Benefits Delivery & Administration, which was offset by softness in Corporate Risk & Broking.
Willis Towers Watson Public Limited Company Price, Consensus and EPS Surprise
Willis Towers Watson posted adjusted consolidated revenues of $2.7 billion, up 1% year over year on a reported basis. Revenues increased 4% on an organic basis and 2% on a constant currency basis. The top line missed the Zacks Consensus Estimate by 3.4%.
The total cost of providing services decreased 3.5% year over year to $2 billion due to lower salaries and benefits, operating expenses, depreciation and amortization.
Adjusted operating income was $871 million, up 1.4% year over year. Margin expanded 180 basis points (bps) to 32.2%.
Adjusted EBITDA was $1 billion, up 4.3% year over year. Adjusted EBITDA margin was 37.9%, up 400 basis points (bps).
Quarterly Segment Update
Human Capital & Benefits: Total revenues of $884 million increased 2% year over year (up 3% both constant currency and organic basis). On an organic basis, the growth was largely driven by Technology and Administration Solutions, in part supported by Health and Benefits and Talent and Rewards. The operating margin was 31.2%, reflecting a decrease of 10 bps.
Corporate Risk & Broking: Total revenues of $882 million decreased 1% year over year (up 1% in both constant currency and organic basis). On an organic basis, North America led the segment with new business generation alongside strong renewals. Revenues decreased in Great Britain, Western Europe and International. The operating margin was 31.2% in the quarter under review, down 120 bps.
Investment, Risk & Reinsurance: Total revenues of $199 million decreased 2% from the prior-year quarter (2% down constant currency and 32% increase organic). Organic growth was driven by revenues recorded in connection with a book-of-business settlement. The operating margin was 25.3%, up 1280 bps.
Benefits Delivery & Administration: Total revenues of $729 million improved 16% (up 5% both constant currency and organic). The increase was driven by Individual Marketplace, primarily by TRANZACT. Benefits Outsourcing revenues improved too. The operating margin was 49.2%, down 150 bps.
Full-Year Highlights
Adjusted earnings of $11.70 per share missed the Zacks Consensus Estimate of $13.38. The bottom line increased 19% year over year.
Total revenues increased 4% from the year-ago quarter to about $9 billion but missed the Zacks Consensus Estimate by a whisker.
Financial Update
Cash and cash equivalents of $4.7 billion at 2021 end more than doubled from the 2020-end level.
Long-term debt decreased 14.8% to $4 billion at quarter-end from 2020 end.
Shareholders’ equity increased 21.7% from the level on Dec 31, 2020 to $13.3 billion as of Dec 31, 2021.
Cash flow from operations was $2.1 billion in 2021, up 16% year over year.
Free cash flow increased 23% to $1.9 billion in 2021.
Fourth-quarter earnings of Brown & Brown, Inc. (BRO - Free Report) , Arthur J. Gallagher & Co. (AJG - Free Report) and Aon plc (AON - Free Report) beat the respective Zacks Consensus Estimate.
Brown & Brown’s adjusted fourth-quarter 2021 earnings of 42 cents per share came ahead of the Zacks Consensus Estimate by 10.5% as well as the year-ago figure by 31.2%. Adjusted revenues of $739 million beat the Zacks Consensus Estimate by 1.5% and rose 15.1% year over year.
Brown & Brown’s EBITDAC was $215.7 million, up 24% year over year. EBITDAC margin expanded 210 basis points (bps) to 29.2%.
Arthur J. Gallagher’s fourth-quarter 2021 adjusted net earnings of 98 cents per share beat the Zacks Consensus Estimate by 5.4% and increased 11.4% on a year-over-year basis. Total revenues were $1.9 billion, up 18.6% year over year and beat the Zacks Consensus Estimate by 5.2%.
Arthur J. Gallagher’s adjusted earnings before interest, tax, depreciation and amortization and change in estimated acquisition earnout payables (EBITDAC) grew 18% from the prior-year quarter to $436.1 million.
Aon’s operating earnings of $3.71 per share outpaced the Zacks Consensus Estimate by 9.1% and climbed 42% year over year.
Aon’s total revenues improved 4% year over year to $3.1 billion but missed the consensus mark by 3.6%. Adjusted operating margin expanded 590 bps to 32.8%.
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Willis Towers (WLTW) Q4 Earnings Top Estimates, Revenues Lag
Willis Towers Watson Public Limited Company (WTW - Free Report) delivered fourth-quarter 2021 adjusted earnings of $5.67 per share, which beat the Zacks Consensus Estimate of $5.35. The bottom line improved 9% year over year.
WTW witnessed a solid performance of the Human Capital and Benefits (HCB) segment, Investment, Risk & Reinsurance, and Benefits Delivery & Administration, which was offset by softness in Corporate Risk & Broking.
Willis Towers Watson Public Limited Company Price, Consensus and EPS Surprise
Willis Towers Watson Public Limited Company price-consensus-eps-surprise-chart | Willis Towers Watson Public Limited Company Quote
Operational Update
Willis Towers Watson posted adjusted consolidated revenues of $2.7 billion, up 1% year over year on a reported basis. Revenues increased 4% on an organic basis and 2% on a constant currency basis. The top line missed the Zacks Consensus Estimate by 3.4%.
The total cost of providing services decreased 3.5% year over year to $2 billion due to lower salaries and benefits, operating expenses, depreciation and amortization.
Adjusted operating income was $871 million, up 1.4% year over year. Margin expanded 180 basis points (bps) to 32.2%.
Adjusted EBITDA was $1 billion, up 4.3% year over year. Adjusted EBITDA margin was 37.9%, up 400 basis points (bps).
Quarterly Segment Update
Human Capital & Benefits: Total revenues of $884 million increased 2% year over year (up 3% both constant currency and organic basis). On an organic basis, the growth was largely driven by Technology and Administration Solutions, in part supported by Health and Benefits and Talent and Rewards. The operating margin was 31.2%, reflecting a decrease of 10 bps.
Corporate Risk & Broking: Total revenues of $882 million decreased 1% year over year (up 1% in both constant currency and organic basis). On an organic basis, North America led the segment with new business generation alongside strong renewals. Revenues decreased in Great Britain, Western Europe and International. The operating margin was 31.2% in the quarter under review, down 120 bps.
Investment, Risk & Reinsurance: Total revenues of $199 million decreased 2% from the prior-year quarter (2% down constant currency and 32% increase organic). Organic growth was driven by revenues recorded in connection with a book-of-business settlement. The operating margin was 25.3%, up 1280 bps.
Benefits Delivery & Administration: Total revenues of $729 million improved 16% (up 5% both constant currency and organic). The increase was driven by Individual Marketplace, primarily by TRANZACT. Benefits Outsourcing revenues improved too. The operating margin was 49.2%, down 150 bps.
Full-Year Highlights
Adjusted earnings of $11.70 per share missed the Zacks Consensus Estimate of $13.38. The bottom line increased 19% year over year.
Total revenues increased 4% from the year-ago quarter to about $9 billion but missed the Zacks Consensus Estimate by a whisker.
Financial Update
Cash and cash equivalents of $4.7 billion at 2021 end more than doubled from the 2020-end level.
Long-term debt decreased 14.8% to $4 billion at quarter-end from 2020 end.
Shareholders’ equity increased 21.7% from the level on Dec 31, 2020 to $13.3 billion as of Dec 31, 2021.
Cash flow from operations was $2.1 billion in 2021, up 16% year over year.
Free cash flow increased 23% to $1.9 billion in 2021.
Zacks Rank
Willis Towers currently 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
Fourth-quarter earnings of Brown & Brown, Inc. (BRO - Free Report) , Arthur J. Gallagher & Co. (AJG - Free Report) and Aon plc (AON - Free Report) beat the respective Zacks Consensus Estimate.
Brown & Brown’s adjusted fourth-quarter 2021 earnings of 42 cents per share came ahead of the Zacks Consensus Estimate by 10.5% as well as the year-ago figure by 31.2%. Adjusted revenues of $739 million beat the Zacks Consensus Estimate by 1.5% and rose 15.1% year over year.
Brown & Brown’s EBITDAC was $215.7 million, up 24% year over year. EBITDAC margin expanded 210 basis points (bps) to 29.2%.
Arthur J. Gallagher’s fourth-quarter 2021 adjusted net earnings of 98 cents per share beat the Zacks Consensus Estimate by 5.4% and increased 11.4% on a year-over-year basis. Total revenues were $1.9 billion, up 18.6% year over year and beat the Zacks Consensus Estimate by 5.2%.
Arthur J. Gallagher’s adjusted earnings before interest, tax, depreciation and amortization and change in estimated acquisition earnout payables (EBITDAC) grew 18% from the prior-year quarter to $436.1 million.
Aon’s operating earnings of $3.71 per share outpaced the Zacks Consensus Estimate by 9.1% and climbed 42% year over year.
Aon’s total revenues improved 4% year over year to $3.1 billion but missed the consensus mark by 3.6%. Adjusted operating margin expanded 590 bps to 32.8%.