Willis Towers Watson PLC (WTW) Reports Q3 2023 Earnings
WTW's Q3 2023 revenue increased by 11% to $2.2 billion, with organic growth of 9%.
Diluted Earnings per Share were $1.29 for the quarter, down 25% from the prior year.
Adjusted Diluted Earnings per Share were $2.24 for the quarter, up 2% from the prior year.
Operating Margin was 7.3% for the quarter, down 60 basis points from the prior year.
Willis Towers Watson PLC (NASDAQ:WTW), a leading global advisory, broking, and solutions company, announced its financial results for the third quarter ended September 30, 2023, on October 26, 2023. The company reported an 11% increase in revenue to $2.2 billion, with organic growth of 9%. However, Diluted Earnings per Share were down by 25% from the prior year to $1.29. Adjusted Diluted Earnings per Share were $2.24, up 2% from the prior year.
Financial Performance
WTW's net income for the third quarter of 2023 was $139 million, a decrease of 28% compared to net income of $192 million in the prior-year third quarter. The company's adjusted EBITDA for the third quarter was $436 million, or 20.1% of revenue, an increase of 7%, compared to adjusted EBITDA of $408 million, or 20.9% of revenue, in the prior-year third quarter.
Cash Flow and Capital Allocation
Cash flows from operating activities were $823 million for the nine months ended September 30, 2023, compared to $437 million for the prior year. Free cash flow for the same period in 2023 and 2022 was $707 million and $337 million, respectively, an improvement of $370 million. During the quarter ended September 30, 2023, the company repurchased $350 million of WTW shares.
Business Highlights
WTW realized $23 million of incremental annualized Transformation program savings, bringing the total to $300 million in cumulative savings since the program's inception. The company also repurchased 1,681,385 of its shares for $350 million. WTW announced the launch of Verita, a new managing general underwriter focused on select industry verticals, to further advance its specialization strategy in Risk & Broking.
Segment Highlights
The Health, Wealth & Career (HWC) segment had revenue of $1.28 billion in the third quarter, an increase of 10% from $1.16 billion in the prior year. The Risk & Broking (R&B) segment had revenue of $855 million in the third quarter, an increase of 12% from $765 million in the prior year.
Outlook
Based on current and anticipated market conditions, WTW expects to deliver mid-single digit organic revenue growth and adjusted operating margin expansion for the full year 2023. The company also expects to deliver approximately $160 million of incremental run-rate savings from the Transformation program in 2023.
Explore the complete 8-K earnings release (here) from Willis Towers Watson PLC for further details.
This article first appeared on GuruFocus.
