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Marsh & McLennan Companies, Inc. (MMC - Free Report) delivered first-quarter 2020 adjusted earnings per share of $1.64, surpassing the Zacks Consensus Estimate by 5.1% on the back of solid revenues. Moreover, the same increased 8% year over year.
Marsh & McLennan’s consolidated revenues of $4.7 billion were up 5% on an underlying basis. This upside is majorly attributable to the Risk and Insurances Services plus Consulting Segments. The top line missed the Zacks Consensus Estimate by 0.1%.
Total operating expenses of $3.6 billion in the first quarter were up 14.3% year over year due to higher compensation and benefits as well as other operating expenses.
Marsh & McLennan Companies, Inc. Price, Consensus and EPS Surprise
Revenues at the Risk and Insurance Services segment were $2.9 billion, up 5% on an underlying basis. Adjusted operating income rose 20% to $932 million from the prior-year quarter’s level. Marsh, a unit within this segment, generated revenues of $2.1 billion, up 5% on an underlying basis. In U.S./Canada, underlying revenues rose 5% year over year.
Underlying revenue growth from international operations of 4% includes 6% increase of the metric in the Asia Pacific, 4% in EMEA and a 3% rise in Latin America.
Another unit under this segment, Guy Carpenter, displayed 7% revenue growth on an underlying basis in the quarter under review.
Consulting
The Consulting segment's revenues inched up 3% on an underlying basis to $1.8 billion. Also, adjusted operating income dipped 1% to $289 million. A unit within this segment, Mercer, generated revenues of $1.3 billion, up 5% on an underlying basis. Wealth’s revenues were up 3% on an underlying basis. Health and Career’s revenues were each up 8% and 2% year over year on an underlying basis.
Another unit, Oliver Wyman Group, registered revenues of $511 million, flat year over year on an underlying basis.
Business Update
The company repaid $500 million of senior notes in the first quarter.
Financial Update
Marsh & McLennan exited the first quarter of 2020 with cash and cash equivalents of $1.5 billion, up 28.1% from the level at 2019 end.
Net cash used in operating activities totaled $638 million, up 131.2% year over year.
As of Mar 31, 2020, Marsh & McLennan’s total assets were $31.3 billion, up 0.1% from the figure as of Dec 31, 2019.
Total equity was $7.5 billion, down 6.2% from the level at 2019 end.
Among other players from the finance sector that reported first-quarter results so far, the bottom-line results of The Progressive Corporation (PGR - Free Report) and The Travelers Companies, Inc. (TRV - Free Report) missed the Zacks Consensus Estimate while that of Globe Life Inc. (GL - Free Report) met the same.
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Marsh & McLennan Companies (MMC) Q1 Earnings Beat, Rise Y/Y
Marsh & McLennan Companies, Inc. (MMC - Free Report) delivered first-quarter 2020 adjusted earnings per share of $1.64, surpassing the Zacks Consensus Estimate by 5.1% on the back of solid revenues. Moreover, the same increased 8% year over year.
Marsh & McLennan’s consolidated revenues of $4.7 billion were up 5% on an underlying basis. This upside is majorly attributable to the Risk and Insurances Services plus Consulting Segments. The top line missed the Zacks Consensus Estimate by 0.1%.
Total operating expenses of $3.6 billion in the first quarter were up 14.3% year over year due to higher compensation and benefits as well as other operating expenses.
Marsh & McLennan Companies, Inc. Price, Consensus and EPS Surprise
Marsh & McLennan Companies, Inc. price-consensus-eps-surprise-chart | Marsh & McLennan Companies, Inc. Quote
Quarterly Segmental Results
Risk and Insurance Services
Revenues at the Risk and Insurance Services segment were $2.9 billion, up 5% on an underlying basis. Adjusted operating income rose 20% to $932 million from the prior-year quarter’s level.
Marsh, a unit within this segment, generated revenues of $2.1 billion, up 5% on an underlying basis. In U.S./Canada, underlying revenues rose 5% year over year.
Underlying revenue growth from international operations of 4% includes 6% increase of the metric in the Asia Pacific, 4% in EMEA and a 3% rise in Latin America.
Another unit under this segment, Guy Carpenter, displayed 7% revenue growth on an underlying basis in the quarter under review.
Consulting
The Consulting segment's revenues inched up 3% on an underlying basis to $1.8 billion. Also, adjusted operating income dipped 1% to $289 million.
A unit within this segment, Mercer, generated revenues of $1.3 billion, up 5% on an underlying basis. Wealth’s revenues were up 3% on an underlying basis. Health and Career’s revenues were each up 8% and 2% year over year on an underlying basis.
Another unit, Oliver Wyman Group, registered revenues of $511 million, flat year over year on an underlying basis.
Business Update
The company repaid $500 million of senior notes in the first quarter.
Financial Update
Marsh & McLennan exited the first quarter of 2020 with cash and cash equivalents of $1.5 billion, up 28.1% from the level at 2019 end.
Net cash used in operating activities totaled $638 million, up 131.2% year over year.
As of Mar 31, 2020, Marsh & McLennan’s total assets were $31.3 billion, up 0.1% from the figure as of Dec 31, 2019.
Total equity was $7.5 billion, down 6.2% from the level at 2019 end.
Zacks Rank and Performance of Other Players
Marsh & McLennan carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Among other players from the finance sector that reported first-quarter results so far, the bottom-line results of The Progressive Corporation (PGR - Free Report) and The Travelers Companies, Inc. (TRV - Free Report) missed the Zacks Consensus Estimate while that of Globe Life Inc. (GL - Free Report) met the same.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained and impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.
This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
See their latest picks free >>