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Marsh & McLennan's (MMC) Q1 Earnings Surpass, Improve Y/Y

Marsh & McLennan Companies, Inc. MMC delivered first-quarter 2021 adjusted earnings per share of $1.99, surpassing the Zacks Consensus Estimate by 17.1%. This is owing to a solid contribution from its Risk and Insurance Services as well as Consulting segments. Moreover, the bottom line increased 21.3% from the year-ago quarter.

Marsh & McLennan’s consolidated revenues of $5.1 billion were up 9% year over year. Moreover, the top line beat the Zacks Consensus Estimate by 5.6% on the back of its strong Risk and Insurance Services as well as Consulting segments.

Total operating expenses of $3.7 billion in the first quarter were up 4% year over year due to higher compensation and benefits.

Quarterly Segmental Results

Risk and Insurance Services

Revenues at this segment were $3.2 billion, up 7% on an underlying basis. Adjusted operating income improved 17% to $1.1 billion from the prior-year quarter’s level.

Marsh, a unit within this segment, generated revenues of $2.3 billion, up 8% on an underlying basis. In the U.S./Canada, underlying revenues rose 9% year over year.

Underlying revenues from international operations rose 6% year over year including an 8% increase of the same in the Asia Pacific, a 6% rise in Latin America and a 6% hike in EMEA.

Revenues from another unit under this segment, Guy Carpenter, were up 7% year over year on an underlying basis in the quarter under review.

Consulting

Revenues were up 3% on an underlying basis to $1.9 billion. Also, adjusted operating income was up 28% to $370 million.

A unit within this segment, Mercer, generated revenues of $1.3 billion, which were flat on an underlying basis. Wealth’s revenues were up 1% on an underlying basis. Health’s revenues were flat year over year while that of Career was up 1% on an underlying basis. Another unit Oliver Wyman Group registered revenues of $585 million, up 11% year over year on an underlying basis.

Financial Update

Marsh & McLennan exited the first quarter with cash and cash equivalents of $1.1 billion, down 46.4% from the level at 2020 end.

Net cash used for operations stood at $408 million, lower than the year-ago quarter’s $638 million.

As of Mar 31, 2021, Marsh & McLennan’s total assets were $32.3 billion, down 2.3% from the figure as of Dec 31, 2020.

Total equity was $9.6 billion, up 3.6% from the level at 2020 end.

Zacks Rank and Performance of Other Players

Marsh & McLennan carries a Zacks Rank #2 (Buy), currently. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Of the insurance industry players that have reported first-quarter results so far, earnings of The Travelers Companies, Inc.  TRV, W.R. Berkley Corporation  WRB and  Brown & Brown, Inc. BRO beat the respective Zacks Consensus Estimate.

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The Travelers Companies, Inc. (TRV): Free Stock Analysis Report
 
W.R. Berkley Corporation (WRB): Free Stock Analysis Report
 
Marsh & McLennan Companies, Inc. (MMC): Free Stock Analysis Report
 
Brown & Brown, Inc. (BRO): Free Stock Analysis Report
 
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