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Willis Towers (WLTW) Beats on Q2 Earnings, Revises View
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Willis Towers Watson plc reported second-quarter 2016 adjusted net income of $1.66 per share, beating the Zacks Consensus Estimate of $1.59. Earnings declined 1.2% year over year.
Including restructuring costs and integration expenses, net income came in at 51 cents, down 49% year over year.
Operational Updates
Adjusted revenues improved 9% (11% constant currency growth, 5% organic growth), year over year to $1.98 billion. Revenues missed the Zacks Consensus Estimate of $2 billion.
On a year-over-year basis, commissions, fees increased 7% to $1.9 billion
Adjusted operating income decreased 20% year over year to $136 million.
Adjusted EBITDA was $406 million, or 20.6% of adjusted revenues, higher than $401 million, or 22.1% of revenues in the year-ago quarter.
Quarterly Segment Update
Human Capital & Benefits: Commissions and fees of $760 million declined 1% year over year (3% on constant currency basis and flat on an organic basis). Total revenues of $765 million increased 1.3%. Operating margin was 15%.
Corporate Risk & Broking: Commissions and fees of $623 million improved 7% (9% constant currency growth and 1% organic increase). Total revenues of $629 million improved 7.5% year over year. Operating margin was 19% in the quarter.
Investment, Risk & Reinsurance: Commissions and fees of $355 million improved 5% (7% constant currency growth but 5% organic decline). Total revenues of $155 million increased 17.7% over the prior-year quarter. Operating margin was 25%.
Exchange Solutions: Commission and fees of $154 million improved 47% (47% constant currency growth but 43% organic decrease). Total revenues of $155 million were up 46% year over year. Operating margin was 20%.
Share Repurchase
The company has bought back $100 million worth shares year to date and envisions repurchasing $200 million in the remainder of the year.
2016 Guidance
Willis Towers Watson projects adjusted earnings per share between $7.60 and $7.80, down from $7.70 and $7.95. Reported earnings per share are expected between $2.48 and $2.68.
Constant currency revenue growth is expected 10% while reported revenue growth is estimated at 7%.
Zacks Rank
Willis Towers presently carries a Zacks Rank #3 (Hold).
The bottom line at Marsh & McLennan Companies, Inc. (MMC - Free Report) was in line with the Zacks Consensus Estimate while Brown & Brown Inc. (BRO - Free Report) beat the same. Aon plc (AON - Free Report) missed out expectation in the second quarter.
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Willis Towers (WLTW) Beats on Q2 Earnings, Revises View
Willis Towers Watson plc reported second-quarter 2016 adjusted net income of $1.66 per share, beating the Zacks Consensus Estimate of $1.59. Earnings declined 1.2% year over year.
Including restructuring costs and integration expenses, net income came in at 51 cents, down 49% year over year.
Operational Updates
Adjusted revenues improved 9% (11% constant currency growth, 5% organic growth), year over year to $1.98 billion. Revenues missed the Zacks Consensus Estimate of $2 billion.
On a year-over-year basis, commissions, fees increased 7% to $1.9 billion
Adjusted operating income decreased 20% year over year to $136 million.
Adjusted EBITDA was $406 million, or 20.6% of adjusted revenues, higher than $401 million, or 22.1% of revenues in the year-ago quarter.
Quarterly Segment Update
Human Capital & Benefits: Commissions and fees of $760 million declined 1% year over year (3% on constant currency basis and flat on an organic basis). Total revenues of $765 million increased 1.3%. Operating margin was 15%.
Corporate Risk & Broking: Commissions and fees of $623 million improved 7% (9% constant currency growth and 1% organic increase). Total revenues of $629 million improved 7.5% year over year. Operating margin was 19% in the quarter.
Investment, Risk & Reinsurance: Commissions and fees of $355 million improved 5% (7% constant currency growth but 5% organic decline). Total revenues of $155 million increased 17.7% over the prior-year quarter. Operating margin was 25%.
Exchange Solutions: Commission and fees of $154 million improved 47% (47% constant currency growth but 43% organic decrease). Total revenues of $155 million were up 46% year over year. Operating margin was 20%.
Share Repurchase
The company has bought back $100 million worth shares year to date and envisions repurchasing $200 million in the remainder of the year.
2016 Guidance
Willis Towers Watson projects adjusted earnings per share between $7.60 and $7.80, down from $7.70 and $7.95. Reported earnings per share are expected between $2.48 and $2.68.
Constant currency revenue growth is expected 10% while reported revenue growth is estimated at 7%.
Zacks Rank
Willis Towers presently carries a Zacks Rank #3 (Hold).
WILLIS TWRS WAT Price, Consensus and EPS Surprise
WILLIS TWRS WAT Price, Consensus and EPS Surprise | WILLIS TWRS WAT Quote
Performance of Other Insurance Brokers
The bottom line at Marsh & McLennan Companies, Inc. (MMC - Free Report) was in line with the Zacks Consensus Estimate while Brown & Brown Inc. (BRO - Free Report) beat the same. Aon plc (AON - Free Report) missed out expectation in the second quarter.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report