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Is a Beat in Store for Marsh & McLennan (MMC) in Q4 Earnings?
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Marsh & McLennan Companies, Inc. (MMC - Free Report) is poised to continue its earnings beat streak in the fourth quarter of 2023. The results are scheduled to be released on Jan 25, before the opening bell.
What do the Estimates Say?
The Zacks Consensus Estimate for fourth-quarter earnings per share (EPS) of $1.60 is indicative of an 8.8% increase from the year-ago quarter’s reported earnings of $1.47 per share. The consensus estimate for revenues is pegged at $5.5 billion, suggesting a rise of 9.9% from the year-ago quarter’s reported figure.
Marsh & McLennan’s earnings beat estimates in all the trailing four quarters, the average surprise being 6.5%. This is depicted in the graph below.
Marsh & McLennan Companies, Inc. Price and EPS Surprise
Our proven model predicts an earnings beat for Marsh & McLennan this time around. 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 +0.57%. This is because the Most Accurate Estimate is currently pegged at $1.61 per share, higher than the Zacks Consensus Estimate of $1.60 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 #3.
Before we get into what to expect for the to-be-reported quarter in detail, it is worth taking a look at MMC’s third-quarter performance.
Q3 Earnings Rewind
In the last reported quarter, this globally leading insurance broker company’s adjusted EPS of $1.57 beat the Zacks Consensus Estimate by 13.8%, primarily on the back of strong international operations of the Marsh business coupled with solid contributions from the Consulting unit in the form of expanding Wealth, Health and Career revenues. However, the upside was partly offset by increased expenses.
Now, let us see how things have shaped up prior to the fourth-quarter earnings announcement.
Factors Driving Q4 Performance
Marsh & McLennan’s fourth-quarter revenues are expected to have been boosted by robust performance in its Risk and Insurance Services and Consulting segments. The Risk and Insurance Services segment is expected to have benefitted from solid contributions from its Marsh and Guy Carpenter sub-divisions. MMC's performance in the fourth quarter is expected to have received a significant boost from robust operations in the international market, with a particular focus on Latin America and Asia. Strong retention and new business generation should boost Marsh & McLennan’s results in the fourth quarter.
The Zacks Consensus Estimate for revenues from the Risk and Insurance Services segment indicates a rise of 11.1% from the prior-year quarter’s level of $2,945 million, whereas our estimate suggests an 8.2% jump. Also, the consensus mark for the segment’s adjusted operating income suggests an almost 20% increase from the prior-year quarter’s figure of $685 million, whereas our model indicates a nearly 27.5% rise.
The Consulting segment of Marsh & McLennan is anticipated to have gained momentum in the fourth quarter, driven by the impressive performance of its sub-unit, Oliver Wyman. The performance of the Oliver Wyman sub-unit is likely to have been bolstered by several strategic acquisitions aimed at enhancing its capabilities and expanding its geographic presence. Also, sequentially improving returns from Wealth and Health operations are likely to have aided the Mercer (another sub-unit of the Consulting segment) business in the to-be-reported quarter. We expect positive net flows and improving assets under management to benefit the Wealth business.
The Zacks Consensus Estimate for revenues of the Mercer sub-division indicates a 6.8% increase from the prior-year quarter’s level of $1,329 million, while the same for the Oliver Wyman business' revenues indicates 10.5% growth.
The Zacks Consensus Estimate for the overall Consulting segment’s revenues indicates growth of approximately 8% from the prior-year quarter’s $2,094 million, whereas our estimate for the metric suggests a 6.7% rise. Also, the consensus mark for the segment’s adjusted operating income is pegged at $445.4 million, suggesting 9.4% 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 fourth quarter but also 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 fourth quarter. Our estimate for total operating expenses in the quarter under review suggests a 1.2% year-over-year decline.
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 Coinbase’s bottom line for the to-be-reported quarter suggests a 95% year-over-year improvement. COIN beat earnings estimates in three of the past four quarters and missed once, with an average surprise of 63%.
Chubb Limited (CB - Free Report) has an Earnings ESP of +0.60% and is a Zacks #3 Ranked player.
The Zacks Consensus Estimate for Chubb’s bottom line for the to-be-reported quarter indicates a 24.4% year-over-year increase. The estimate increased 4 cents over the past week. Furthermore, the consensus mark for CB’s revenues is pegged at $12.9 billion, suggesting 10.2% growth from a year ago.
Brookfield Asset Management Ltd. (BAM - Free Report) has an Earnings ESP of +0.69% and a Zacks Rank of 3.
The Zacks Consensus Estimate for Brookfield Asset Management’s bottom line for the to-be-reported quarter indicates 9.7% growth from the year-ago period. BAM beat earnings estimates twice in the past four quarters and missed on the other two occasions, with an average surprise of 0.2%.
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Is a Beat in Store for Marsh & McLennan (MMC) in Q4 Earnings?
Marsh & McLennan Companies, Inc. (MMC - Free Report) is poised to continue its earnings beat streak in the fourth quarter of 2023. The results are scheduled to be released on Jan 25, before the opening bell.
What do the Estimates Say?
The Zacks Consensus Estimate for fourth-quarter earnings per share (EPS) of $1.60 is indicative of an 8.8% increase from the year-ago quarter’s reported earnings of $1.47 per share. The consensus estimate for revenues is pegged at $5.5 billion, suggesting a rise of 9.9% from the year-ago quarter’s reported figure.
Marsh & McLennan’s earnings beat estimates in all the trailing four quarters, the average surprise being 6.5%. 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 an earnings beat for Marsh & McLennan this time around. 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 +0.57%. This is because the Most Accurate Estimate is currently pegged at $1.61 per share, higher than the Zacks Consensus Estimate of $1.60 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 #3.
Before we get into what to expect for the to-be-reported quarter in detail, it is worth taking a look at MMC’s third-quarter performance.
Q3 Earnings Rewind
In the last reported quarter, this globally leading insurance broker company’s adjusted EPS of $1.57 beat the Zacks Consensus Estimate by 13.8%, primarily on the back of strong international operations of the Marsh business coupled with solid contributions from the Consulting unit in the form of expanding Wealth, Health and Career revenues. However, the upside was partly offset by increased expenses.
Now, let us see how things have shaped up prior to the fourth-quarter earnings announcement.
Factors Driving Q4 Performance
Marsh & McLennan’s fourth-quarter revenues are expected to have been boosted by robust performance in its Risk and Insurance Services and Consulting segments. The Risk and Insurance Services segment is expected to have benefitted from solid contributions from its Marsh and Guy Carpenter sub-divisions. MMC's performance in the fourth quarter is expected to have received a significant boost from robust operations in the international market, with a particular focus on Latin America and Asia. Strong retention and new business generation should boost Marsh & McLennan’s results in the fourth quarter.
The Zacks Consensus Estimate for revenues from the Risk and Insurance Services segment indicates a rise of 11.1% from the prior-year quarter’s level of $2,945 million, whereas our estimate suggests an 8.2% jump. Also, the consensus mark for the segment’s adjusted operating income suggests an almost 20% increase from the prior-year quarter’s figure of $685 million, whereas our model indicates a nearly 27.5% rise.
The Consulting segment of Marsh & McLennan is anticipated to have gained momentum in the fourth quarter, driven by the impressive performance of its sub-unit, Oliver Wyman. The performance of the Oliver Wyman sub-unit is likely to have been bolstered by several strategic acquisitions aimed at enhancing its capabilities and expanding its geographic presence. Also, sequentially improving returns from Wealth and Health operations are likely to have aided the Mercer (another sub-unit of the Consulting segment) business in the to-be-reported quarter. We expect positive net flows and improving assets under management to benefit the Wealth business.
The Zacks Consensus Estimate for revenues of the Mercer sub-division indicates a 6.8% increase from the prior-year quarter’s level of $1,329 million, while the same for the Oliver Wyman business' revenues indicates 10.5% growth.
The Zacks Consensus Estimate for the overall Consulting segment’s revenues indicates growth of approximately 8% from the prior-year quarter’s $2,094 million, whereas our estimate for the metric suggests a 6.7% rise. Also, the consensus mark for the segment’s adjusted operating income is pegged at $445.4 million, suggesting 9.4% 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 fourth quarter but also 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 fourth quarter. Our estimate for total operating expenses in the quarter under review suggests a 1.2% year-over-year decline.
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:
Coinbase Global, Inc. (COIN - Free Report) has an Earnings ESP of +160.61% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Coinbase’s bottom line for the to-be-reported quarter suggests a 95% year-over-year improvement. COIN beat earnings estimates in three of the past four quarters and missed once, with an average surprise of 63%.
Chubb Limited (CB - Free Report) has an Earnings ESP of +0.60% and is a Zacks #3 Ranked player.
The Zacks Consensus Estimate for Chubb’s bottom line for the to-be-reported quarter indicates a 24.4% year-over-year increase. The estimate increased 4 cents over the past week. Furthermore, the consensus mark for CB’s revenues is pegged at $12.9 billion, suggesting 10.2% growth from a year ago.
Brookfield Asset Management Ltd. (BAM - Free Report) has an Earnings ESP of +0.69% and a Zacks Rank of 3.
The Zacks Consensus Estimate for Brookfield Asset Management’s bottom line for the to-be-reported quarter indicates 9.7% growth from the year-ago period. BAM beat earnings estimates twice in the past four quarters and missed on the other two occasions, with an average surprise of 0.2%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.