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Willis Towers (WLTW) Q4 Earnings Top Estimates, Improve Y/Y

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Willis Towers Watson Public Limited Company (WLTW - Free Report) delivered fourth-quarter 2019 adjusted earnings of $4.90 per share, surpassing the Zacks Consensus Estimate of $4.85 by 1%.

The quarter under discussion witnessed organic revenue growth.

Also, the bottom line improved 22.5% from the year-ago figure on the back of higher segmental revenue contributions.

Operational Update

Willis Towers Watson posted adjusted consolidated revenues of $2.69 million, up 13% year over year. Moreover, the metric grew 5% on organic basis. The top line also beat the Zacks Consensus Estimate by 2.2%.

Total cost of providing services increased 5.3% year over year to $2 billion.

Adjusted EBITDA for the fourth quarter was $930 million, up 20.2% year over year.

Adjusted operating income surged 24.5% year over year to $809 million in the reported quarter.

Quarterly Segment Update

Human Capital & Benefits:
Total revenues of $865 million were up 3% year over year. Operating margin was 30.1% for the quarter under review.

Corporate Risk & Broking: Total revenues of $877 million improved 7% year over year. Operating margin was 30.3% in the quarter under review.

Investment, Risk & Reinsurance: Total revenues of $314 million was up 12% from the prior-year quarter’s number. Operating margin was 9.1%.

Benefits Delivery & Administration: Total revenues of $595 million soared 53% year over year. Operating margin was 52.4%.

Financial Update

Cash and cash equivalents decreased 14.1% to $887 million from the 2018-end level.

Long-term debt increased 20.8% from the level at 2018 end to nearly $5.3 billion at the reported quarter-end.

Shareholders’ equity increased 4% from the level on Dec 31, 2018 to $10.4 billion as of Dec 31, 2019.

For 2019, cash from operations declined 16% year over year to $1.08 billion.

For the same period, free cash flow was $835 million, down 18% year over year.

The company bought back shares worth $3 million in the quarter under review.

Full-Year Update

For the full year, the company repurchased shares worth $150 million.

For the year ended Dec 31, 2019, revenues were $9.04 billion, up 6% year over year.

Adjusted earnings per share came in at $10.96, up 12.6% year over year.

Zacks Rank

Willis Towers carries a Zacks Rank #2 (Buy). 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 fourth-quarter earnings so far, the bottom-line results of Brown & Brown, Inc. (BRO - Free Report) and RLI Corp. (RLI - Free Report) beat the respective Zacks Consensus Estimate while that of Principal Financial (PFG - Free Report) matched the same.

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