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Marsh & McLennan (MMC): Will it Disappoint in Q4 Earnings?
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Marsh & McLennan Companies, Inc. (MMC - Free Report) is scheduled to report fourth-quarter and full-year 2016 results on Feb 2, before the opening bell.
Last quarter, Marsh & McLennan reported in line with the Zacks Consensus Estimate. Let’s see how things are shaping up for this announcement.
Marsh & McLennan Companies, Inc. Price and EPS Surprise
Marsh & McLennan earnings are expected to see accretion from significant investments for growth over many years, both organic and through acquisitions.
The company’s revenues have been growing consistently for the past many quarters and we expect the trend to continue in the fourth quarter. Revenues will see an upside from the company’s vast geographical footprint. Both its segments – Risk & Insurance Services and Consulting – are expected to contribute to the growth.
In the fourth quarter, the company expects Oliver Wyman's revenue growth to be relatively flat with last year. Revenues from the unit declined last quarter due to comparisons to robust growth in the financial services practice last year as well as global growth concerns raised by Brexit uncertainty.
Moreover, disciplined expense management will likely drive margin growth. The company, however, expects to incur incremental pension expense of a 1 cent per share or so in the fourth quarter. This additional expense will be included in its adjusted earnings per share.
The company’s efforts toward returning capital to shareholders through substantial share repurchase will drive bottom-line growth.
Earnings Whispers
Our proven model does not conclusively show that Marsh & McLennan is likely to beat on earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here as you will see below.
Zacks ESP: Marsh & McLennan has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 69 cents 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 carries a Zacks Rank #3 (Hold) which decreases the predictive power of ESP. We caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks That Warrant a Look
Here are some companies that you may consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Molina Healthcare Inc. (MOH - Free Report) has an Earnings ESP of +5.33% and a Zacks Rank #3. The company is expected to report fourth-quarter earnings results on Feb 13.
CVS Health Corporation (CVS - Free Report) has an Earnings ESP of +0.60% and a Zacks Rank #3. The company is expected to report fourth-quarter and 2016 earnings results on Feb 9.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2017?
Who wouldn't? As of early December, the 2016 Top 10 produced 5 double-digit winners including oil and natural gas giant Pioneer Natural Resources which racked up a stellar +50% gain. The new list is painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. Be among the very first to see it>>
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Marsh & McLennan (MMC): Will it Disappoint in Q4 Earnings?
Marsh & McLennan Companies, Inc. (MMC - Free Report) is scheduled to report fourth-quarter and full-year 2016 results on Feb 2, before the opening bell.
Last quarter, Marsh & McLennan reported in line with the Zacks Consensus Estimate. Let’s see how things are shaping up for this announcement.
Marsh & McLennan Companies, Inc. Price and EPS Surprise
Marsh & McLennan Companies, Inc. Price and EPS Surprise | Marsh & McLennan Companies, Inc. Quote
Factors to Influence Q4 Results
Marsh & McLennan earnings are expected to see accretion from significant investments for growth over many years, both organic and through acquisitions.
The company’s revenues have been growing consistently for the past many quarters and we expect the trend to continue in the fourth quarter. Revenues will see an upside from the company’s vast geographical footprint. Both its segments – Risk & Insurance Services and Consulting – are expected to contribute to the growth.
In the fourth quarter, the company expects Oliver Wyman's revenue growth to be relatively flat with last year. Revenues from the unit declined last quarter due to comparisons to robust growth in the financial services practice last year as well as global growth concerns raised by Brexit uncertainty.
Moreover, disciplined expense management will likely drive margin growth.
The company, however, expects to incur incremental pension expense of a 1 cent per share or so in the fourth quarter. This additional expense will be included in its adjusted earnings per share.
The company’s efforts toward returning capital to shareholders through substantial share repurchase will drive bottom-line growth.
Earnings Whispers
Our proven model does not conclusively show that Marsh & McLennan is likely to beat on earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here as you will see below.
Zacks ESP: Marsh & McLennan has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 69 cents 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 carries a Zacks Rank #3 (Hold) which decreases the predictive power of ESP. We caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks That Warrant a Look
Here are some companies that you may consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Healthways, Inc. is expected to report fourth-quarter and full-year 2016 earnings results on Feb 23. The company has an Earnings ESP of +2.86% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Molina Healthcare Inc. (MOH - Free Report) has an Earnings ESP of +5.33% and a Zacks Rank #3. The company is expected to report fourth-quarter earnings results on Feb 13.
CVS Health Corporation (CVS - Free Report) has an Earnings ESP of +0.60% and a Zacks Rank #3. The company is expected to report fourth-quarter and 2016 earnings results on Feb 9.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2017?
Who wouldn't? As of early December, the 2016 Top 10 produced 5 double-digit winners including oil and natural gas giant Pioneer Natural Resources which racked up a stellar +50% gain. The new list is painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. Be among the very first to see it>>