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Marsh & McLennan's (MMC) Q1 Earnings Beat Estimates, Up Y/Y

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Marsh & McLennan Companies, Inc. (MMC - Free Report) delivered first-quarter 2019 adjusted earnings per share of $1.52, surpassing the Zacks Consensus Estimate by 4.8%. Also, the bottom line improved 10.1% year over year. Moreover, Marsh & McLennan’s consolidated revenues were $4.1 billion, up 4% on an underlying basis. This upside is majorly attributable to the Risk and Insurances Services plus Consulting Segments. However, the top line missed the Zacks Consensus Estimate by 3.1%.

Total operating expenses of $3.1 billion in the first quarter inched up 1.3% year over year due to high compensation and benefits.

Quarterly Segment Results

Risk and Insurance Services

Revenues at the Risk and Insurance Services segment were $2.4 billion, up 5% on an underlying basis. Adjusted operating income increased 7% to $775 million from the prior-year quarter’s level.

Marsh, a unit within this segment, generated revenues of $1.7 billion, up 5% on an underlying basis. In U.S./Canada, underlying revenues rose 5%. Underlying revenue growth from international operations of 5% includes 8% of the metric in Asia Pacific, 3% in EMEA and 11% in Latin America.

Another unit under this segment — Guy Carpenter — displayed 6% revenue growth on an underlying basis.

Consulting

The Consulting segment's revenues rose 2% on an underlying basis to $1.7 billion. Also, adjusted operating income increased 18% year over year to $291 million.

A unit within this segment — Mercer — reported revenues of $1.2 billion, flat on an underlying basis. Wealth’s revenues dipped 1% on an underlying basis.

Another unit, Oliver Wyman Group, registered revenues of $518 million, up 7% on an underlying basis.

Acquisition Update

The company completed the buyout of Jardine Lloyd Thompson Group (JLT) for $5.6 billion on Apr 1, 2019.

It also closed the acquisition of Clearwater, FL-based Bouchard Insurance Inc. in February and announced the purchase of Phoenix, AZ-based Lovitt & Touché Inc in April.

Financial Update

Marsh & McLennan exited the quarter with cash and cash equivalents of nearly $1.1 billion, up 4.8% from the figure at 2018 end.

Cash outflow for operations totaled $276 million, down 24.2% year over year.

As of Mar 31, 2018, Marsh & McLennan’s total assets were $30.1 billion, up 40% from the tally as of Dec 31, 2018.

Total equity was $7.9 billion, up 5.3% from the level at year-end 2018.

Zacks Rank

Marsh & McLennan 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

Among other players from the insurance industry having reported first-quarter earnings so far, the bottom-line results of The Travelers Companies, Inc. (TRV - Free Report) , Cincinnati Financial Corporation (CINF - Free Report) and The Progressive Corporation (PGR - Free Report) beat the respective Zacks Consensus Estimate.

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