Insurance brokerage Marsh & McLennan Companies Inc. (MMC) on Thursday reported a 19 percent increase in profit for the first quarter, reflecting higher revenues at its risk and insurance segment. Adjusted earnings per share beat analysts' expectations, while revenues missed their estimates.
Dan Glaser, president and CEO of Marsh & McLennan, said, "Marsh delivered underlying revenue growth across all major geographies, led by strong performance in the International division as well as sequential improvement in the U.S./Canada division. Guy Carpenter's underlying revenue growth in the quarter was driven by strong growth in its International and Global Specialty operations. The Consulting segment produced significant growth in profitability and margin expansion, led by Mercer."
Risk and Insurance Services segment revenue for the first quarter rose 5 percent from the prior-year period to $1.77 billion.
Marsh's revenue grew 5 percent or 4 percent on an underlying basis, to $1.39 billion. International operations underlying revenue grew 5 percent, reflecting growth of 13 percent in Latin America, 6 percent in Asia Pacific and 3 percent in EMEA. In the U.S./Canada division, underlying revenue grew 2 percent.
Guy Carpenter's revenue for the quarter was $375 million, an increase of 5 percent on a reported basis and 4 percent on an underlying basis.
Meanwhile, consulting segment revenues declined 1 percent from the year-ago period to $1.36 billion. Of this, Mercer's revenue increased 3 percent on reported and underlying basis to $1.04 billion.
New York-based Marsh & McLennan's first-quarter net income was $413 million or $0.74 per share, up from $347 million or $0.63 per share in the prior-year quarter.
Adjusted earnings for the quarter were $406 million or $0.73 per share, compared with $349 million or $0.63 per share in the year-ago period. On average, 20 analysts polled by Thomson Reuters expected earnings per share of $0.69 for the quarter. Analysts' estimates typically exclude one-time items.
Consolidated revenue for the quarter rose 2 percent to $3.13 billion, on both a reported and underlying basis, from $3.05 billion in the previous-year quarter. Analysts had a consensus revenue estimate of $3.18 billion.
The company's operating margin rose to 19.4 percent from 17.3 percent in the prior-year period.
In Thursday's regular session, MMC is trading at $37.81, down $0.02 or 0.05 percent on a volume of 400 shares.
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