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Can Marsh & McLennan (MMC) Q2 Earnings Beat on Consulting Boost?
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Marsh & McLennan Companies, Inc. (MMC - Free Report) is set to continue its earnings beat streak for the second quarter of 2023, the results for which are scheduled to be released on Jul 20, before the opening bell.
What Do the Estimates Say?
The Zacks Consensus Estimate for second-quarter earnings per share of $2.12 has witnessed two upward revisions in the past 30 days against no movement in the opposite direction. The estimate is indicative of a 12.2% increase from the year-ago quarter’s reported earnings of $1.89 per share.
The Zacks Consensus Estimate for revenues is pegged at $5.7 billion, suggesting a rise of 6.6% from the year-ago quarter’s reported figure.
Marsh & McLennan’s earnings beat estimates in all the trailing four quarters, the average being 2.9%. This is depicted in the graph below.
Marsh & McLennan Companies, Inc. Price and EPS Surprise
Our proven model predicts a likely earnings beat for Marsh & McLennan this time around as well. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat, which is precisely the case here.
Earnings ESP: Marsh & McLennan has an Earnings ESP of +0.67%. This is because the Most Accurate Estimate is currently pegged at $2.14 per share, higher than the Zacks Consensus Estimate of $2.12 per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Marsh & McLennan currently has a Zacks Rank #2.
Before we get into what to expect for the to-be-reported quarter in detail, it’s worth taking a look at MMC’s previous-quarter performance first.
Q1 Earnings Rewind
In the last reported quarter, the globally leading insurance broker company’s adjusted earnings per share of $2.53 beat the Zacks Consensus Estimate by 3.3%, primarily on the back of solid contributions from its Risk and Insurance Services, and Consulting segments. However, the upside was partly offset by higher compensation and benefits costs.
Now, let us see how things have shaped up prior to the second-quarter earnings announcement.
Factors Driving Q2 Performance
Strong performances from MMC’s Risk and Insurance Services and Consulting segments are likely to have aided its top line in the second quarter of 2023. The Risk and Insurance Services segment is expected to have gained on the back of solid contributions from its Marsh and Guy Carpenter sub-divisions. Strong operations in the international market, especially in Latin America and Asia are expected to have provided an impetus to MMC’s second-quarter performance.
The Zacks Consensus Estimate for revenues from the Risk and Insurance Services segment is pegged at $3,615.3 million, indicating a rise of 9.1% from the prior-year quarter’s level, whereas our estimate suggests a 7.3% jump. Also, the consensus mark for the segment’s adjusted operating income stands at $1,163.4 million, suggesting a 14.7% increase from the prior-year quarter’s reported figure.
Marsh & McLennan’s Consulting segment is expected to have gained momentum from the strong performance of its Oliver Wyman sub-unit in the second quarter. Several acquisitions pursued by Oliver Wyman, which have solidified its capabilities and geographic reach, are likely to have buoyed the performance of the sub-branch. However, reduced returns from Wealth and Health operations are likely to have acted as a partial offset to the Mercer (another sub-unit of the Consulting segment) business in the to-be-reported quarter.
The Zacks Consensus Estimate for revenues of the Mercer sub-division indicates a 1.5% increase from the prior-year quarter’s level, whereas the same for the Oliver Wyman business' revenues indicates 3.6% growth.
The Zacks Consensus Estimate for the overall Consulting segment’s revenues is pegged at $2,132 million, which indicates growth of 2.3% from the prior-year quarter’s tally. Our estimate for the metric stands at $2,095.3 million. Also, the consensus mark for the segment’s adjusted operating income is pegged at $464.7 million, suggesting almost 26% growth from the year-ago quarter’s reported number.
The factors stated above are expected to have positioned the company for not only year-over-year growth in the second quarter but also a likely earnings beat. This is expected to be supported by lower costs. The company had undertaken multiple cost-curbing efforts, which are likely to have aided its bottom line in the second quarter.
Our estimate for total operating expenses in the quarter under review suggests an almost 1% year-over-year decline. Despite the positives, foreign exchange is likely to have inflicted an adverse impact on Marsh & McLennan’s margins in the to-be-reported quarter, partially offsetting the gains.
Other Stocks That Warrant a Look
Here are some other companies worth considering from the broader finance space, as our model shows that these too have the right combination of elements to beat on earnings this time around:
The Zacks Consensus Estimate for Corebridge’s bottom line for the to-be-reported quarter is pegged at 96 cents per share, which witnessed four upward estimate revisions in the past 30 days against one in the opposite direction. The consensus estimate for CRBG’s revenues is pegged at $4.5 billion.
Aon plc (AON - Free Report) has an Earnings ESP of +2.56% and a Zacks Rank of 3.
The Zacks Consensus Estimate for AON’s bottom line for the to-be-reported quarter is pegged at $2.82 per share, indicating 7.2% year-over-year growth. The estimate witnessed two upward estimate revisions in the past month against none in the opposite direction. AON beat earnings estimates in three of the past four quarters and missed once, with an average surprise of 1.6%.
CME Group Inc. (CME - Free Report) has an Earnings ESP of +0.84% and a Zacks Rank of 2.
The Zacks Consensus Estimate for CME Group’s bottom line for the to-be-reported quarter is pegged at $2.16 per share, suggesting a 9.6% year-over-year increase. The estimate witnessed seven upward estimate revisions in the past week against none in the opposite direction. CME beat earnings estimates in all the past four quarters, with an average surprise of 2.2%.
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Can Marsh & McLennan (MMC) Q2 Earnings Beat on Consulting Boost?
Marsh & McLennan Companies, Inc. (MMC - Free Report) is set to continue its earnings beat streak for the second quarter of 2023, the results for which are scheduled to be released on Jul 20, before the opening bell.
What Do the Estimates Say?
The Zacks Consensus Estimate for second-quarter earnings per share of $2.12 has witnessed two upward revisions in the past 30 days against no movement in the opposite direction. The estimate is indicative of a 12.2% increase from the year-ago quarter’s reported earnings of $1.89 per share.
The Zacks Consensus Estimate for revenues is pegged at $5.7 billion, suggesting a rise of 6.6% from the year-ago quarter’s reported figure.
Marsh & McLennan’s earnings beat estimates in all the trailing four quarters, the average being 2.9%. This is depicted in the graph below.
Marsh & McLennan Companies, Inc. Price and EPS Surprise
Marsh & McLennan Companies, Inc. price-eps-surprise | Marsh & McLennan Companies, Inc. Quote
What the Quantitative Model Suggests
Our proven model predicts a likely earnings beat for Marsh & McLennan this time around as well. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat, which is precisely the case here.
Earnings ESP: Marsh & McLennan has an Earnings ESP of +0.67%. This is because the Most Accurate Estimate is currently pegged at $2.14 per share, higher than the Zacks Consensus Estimate of $2.12 per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Marsh & McLennan currently has a Zacks Rank #2.
Before we get into what to expect for the to-be-reported quarter in detail, it’s worth taking a look at MMC’s previous-quarter performance first.
Q1 Earnings Rewind
In the last reported quarter, the globally leading insurance broker company’s adjusted earnings per share of $2.53 beat the Zacks Consensus Estimate by 3.3%, primarily on the back of solid contributions from its Risk and Insurance Services, and Consulting segments. However, the upside was partly offset by higher compensation and benefits costs.
Now, let us see how things have shaped up prior to the second-quarter earnings announcement.
Factors Driving Q2 Performance
Strong performances from MMC’s Risk and Insurance Services and Consulting segments are likely to have aided its top line in the second quarter of 2023. The Risk and Insurance Services segment is expected to have gained on the back of solid contributions from its Marsh and Guy Carpenter sub-divisions. Strong operations in the international market, especially in Latin America and Asia are expected to have provided an impetus to MMC’s second-quarter performance.
The Zacks Consensus Estimate for revenues from the Risk and Insurance Services segment is pegged at $3,615.3 million, indicating a rise of 9.1% from the prior-year quarter’s level, whereas our estimate suggests a 7.3% jump. Also, the consensus mark for the segment’s adjusted operating income stands at $1,163.4 million, suggesting a 14.7% increase from the prior-year quarter’s reported figure.
Marsh & McLennan’s Consulting segment is expected to have gained momentum from the strong performance of its Oliver Wyman sub-unit in the second quarter. Several acquisitions pursued by Oliver Wyman, which have solidified its capabilities and geographic reach, are likely to have buoyed the performance of the sub-branch. However, reduced returns from Wealth and Health operations are likely to have acted as a partial offset to the Mercer (another sub-unit of the Consulting segment) business in the to-be-reported quarter.
The Zacks Consensus Estimate for revenues of the Mercer sub-division indicates a 1.5% increase from the prior-year quarter’s level, whereas the same for the Oliver Wyman business' revenues indicates 3.6% growth.
The Zacks Consensus Estimate for the overall Consulting segment’s revenues is pegged at $2,132 million, which indicates growth of 2.3% from the prior-year quarter’s tally. Our estimate for the metric stands at $2,095.3 million. Also, the consensus mark for the segment’s adjusted operating income is pegged at $464.7 million, suggesting almost 26% growth from the year-ago quarter’s reported number.
The factors stated above are expected to have positioned the company for not only year-over-year growth in the second quarter but also a likely earnings beat. This is expected to be supported by lower costs. The company had undertaken multiple cost-curbing efforts, which are likely to have aided its bottom line in the second quarter.
Our estimate for total operating expenses in the quarter under review suggests an almost 1% year-over-year decline. Despite the positives, foreign exchange is likely to have inflicted an adverse impact on Marsh & McLennan’s margins in the to-be-reported quarter, partially offsetting the gains.
Other Stocks That Warrant a Look
Here are some other companies worth considering from the broader finance space, as our model shows that these too have the right combination of elements to beat on earnings this time around:
Corebridge Financial, Inc. (CRBG - Free Report) has an Earnings ESP of +0.66% and is a Zacks #1 Ranked player. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Corebridge’s bottom line for the to-be-reported quarter is pegged at 96 cents per share, which witnessed four upward estimate revisions in the past 30 days against one in the opposite direction. The consensus estimate for CRBG’s revenues is pegged at $4.5 billion.
Aon plc (AON - Free Report) has an Earnings ESP of +2.56% and a Zacks Rank of 3.
The Zacks Consensus Estimate for AON’s bottom line for the to-be-reported quarter is pegged at $2.82 per share, indicating 7.2% year-over-year growth. The estimate witnessed two upward estimate revisions in the past month against none in the opposite direction. AON beat earnings estimates in three of the past four quarters and missed once, with an average surprise of 1.6%.
CME Group Inc. (CME - Free Report) has an Earnings ESP of +0.84% and a Zacks Rank of 2.
The Zacks Consensus Estimate for CME Group’s bottom line for the to-be-reported quarter is pegged at $2.16 per share, suggesting a 9.6% year-over-year increase. The estimate witnessed seven upward estimate revisions in the past week against none in the opposite direction. CME beat earnings estimates in all the past four quarters, with an average surprise of 2.2%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.