Insurance brokerage Marsh & McLennan Companies Inc. (MMC) is due to publish its fourth-quarter results before the market opens Wednesday, with analysts forecasting earnings of $0.37 per share on revenues of $2.56 billion. In the year-ago period, the company reported adjusted earnings of $0.37 per share and revenues of $2.66 billion.
Despite a continued softening of the commercial insurance market and overall challenging global economic conditions, profitability for insurance brokers remained relatively stable in 2009, Fitch Ratings said in its annual analysis of the U.S. insurance brokerage industry. Fitch expects "overall industry profitability to be flat to modestly improved in 2010, but organic revenue growth and meaningful operating margin improvement could continue to prove elusive."
For the third quarter, the New York-based company posted a profit of $221 million or $0.41 per share, compared to a loss of $8 million or $0.02 per share in the prior year period, as significant reduction in costs offset the lower revenues. Quarterly revenues declined 11% to $2.5 billion from the previous year's $2.82 billion. On underlying basis, revenues were down 7%.
While reporting third-quarter results Brian Duperreault, President and CEO of Marsh & McLennan, said, "While the economic environment continues to be challenging, MMC's results reflect the effective management actions taken by our business leaders over the past year, including significant expense reduction."
Among other players in the field, Aon Corp. (AON) swung to a profit in the fourth-quarter totaling $198 million or $0.69 per share for the fourth quarter, compared to a net loss of $6 million or $0.02 per share a year ago, reflecting lower loss from discontinued operations as well as 9% quarterly revenue growth. Total revenues for the quarter rose 9% to $2.07 billion from $1.91 billion in the previous year.
Another peer, Arthur J. Gallagher & Co. (AJG) posted higher fourth-quarter profit that totaled $16.8 million or $0.16 per share, compared to $4.7 million or $0.05 per share for the year-ago quarter, aided by higher revenue from its brokerage segment. Total revenue advanced 5.6% to $435.1 million from $412.1 million in the prior-year period.
MMC closed Tuesday's trading session at $22.19. In the past 52 weeks, the stock has been trading between $17.18 and $25.46, on a volume of 2.17 million shares.
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