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Marsh & McLennan's (MMC) Q2 Earnings Beat, Rise Y/Y

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Marsh& McLennan Companies, Inc. MMC delivered second-quarter 2021 adjusted earnings per share of $1.75, surpassing the Zacks Consensus of Estimate by 23.2%. This upside is owing to a solid contribution from its Risk and Insurance Services as well as Consulting segments. The bottom line also improved 32.6% from the year-ago quarter’s level.

Marsh & McLennan’s consolidated revenues of $5 billion were up 20% year over year. The top line too beat the Zacks Consensus Estimate by 12.9% on the back of its strong Risk and Insurance Services as well as Consulting segments.

Total operating expenses of $3.7 billion in the second quarter were up 14.7% year over year due to higher compensation and benefits.

Marsh & McLennan Companies, Inc. Price, Consensus and EPS Surprise

Marsh & McLennan Companies, Inc. Price, Consensus and EPS Surprise
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 were $3.1 billion, up 13% on an underlying basis. Adjusted operating income improved 22% to $927 million from the prior-year quarter’s level.

Marsh, a unit within this segment, generated revenues worth $2.7 billion, up 14% on an underlying basis. In the U.S./Canada, underlying revenues rose 15% year over year.

Underlying revenues from international operations rose 13% year over year including a 10% increase of the same in the Asia Pacific, a 2% rise in Latin America and a 16% hike in EMEA.

Revenues from another unit under this segment, Guy Carpenter were up 12% year over year on an underlying basis in the quarter under review.

Consulting

Revenues were up 12% on an underlying basis to $1.9 billion. Adjusted operating income surged 34% to $356 million as well.

A unit within this segment, Mercer, generated revenues of $1.3 billion, climbing 6% on an underlying basis. Wealth’s revenues inched up 4% on an underlying basis. Health’s revenues were up 4% year over year while the same at Career was up 15% on an underlying basis. Another unit Oliver Wyman Group registered revenues worth $618 million, up 28% year over year on an underlying basis.

Share Repurchase Update

The company bought back shares worth $322 million in the quarter under review.

Its board of directors hiked the quarterly dividend by 15% to 53.5 cents per share.

Financial Update

Marsh & McLennan exited the second quarter with cash and cash equivalents of $888 million, down 57.1% from the level at 2020 end.

Net cash used for operations stood at $750 million at the end of the first six months of 2021, 29.8% above the year-ago quarter’s value.

As of Jun 30, 2021, Marsh & McLennan’s total assets were $32.9 billion, down 0.3% from the figure as of Dec 31, 2020.

Total equity was $10.2 billion, up 10.8% from the level at 2020 end.

Zacks Rank and Performance of Other Players

Marsh & McLennan carries a Zacks Rank #3 (Hold), currently. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Among other insurance industry players, which have reported second-quarter earnings so far, the bottom-line results of The Progressive Corporation PGR, RLI Corp. RLI and The Travelers Companies, Inc. TRV beat the respective Zacks Consensus Estimate.


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