Back to top

Image: Bigstock

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

Read MoreHide Full Article

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.


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.

Radical New Technology Creates $12.3 Trillion Opportunity

Imagine buying Microsoft stock in the early days of personal computers… or Motorola after it released the world’s first cell phone. These technologies changed our lives and created massive profits for investors.

Today, we’re on the brink of the next quantum leap in technology. 7 innovative companies are leading this “4th Industrial Revolution” - and early investors stand to earn the biggest profits.

See the 7 breakthrough stocks now>>