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Willis Towers (WLTW) Q4 Earnings Top Estimates, Improve Y/Y

Zacks Equity Research

Willis Towers Watson Public Limited Company WLTW delivered fourth-quarter 2019 adjusted earnings of $4.90 per share, surpassing the Zacks Consensus Estimate of $4.85 by 1%.

The quarter under discussion witnessed organic revenue growth.

Also, the bottom line improved 22.5% from the year-ago figure on the back of higher segmental revenue contributions.

Operational Update

Willis Towers Watson posted adjusted consolidated revenues of $2.69 million, up 13% year over year. Moreover, the metric grew 5% on organic basis. The top line also beat the Zacks Consensus Estimate by 2.2%.

Total cost of providing services increased 5.3% year over year to $2 billion.

Adjusted EBITDA for the fourth quarter was $930 million, up 20.2% year over year.

Adjusted operating income surged 24.5% year over year to $809 million in the reported quarter.

Willis Towers Watson Public Limited Company Price, Consensus and EPS Surprise

Willis Towers Watson Public Limited Company Price, Consensus and EPS Surprise

Willis Towers Watson Public Limited Company price-consensus-eps-surprise-chart | Willis Towers Watson Public Limited Company Quote

Quarterly Segment Update

Human Capital & Benefits:
Total revenues of $865 million were up 3% year over year. Operating margin was 30.1% for the quarter under review.

Corporate Risk & Broking: Total revenues of $877 million improved 7% year over year. Operating margin was 30.3% in the quarter under review.

Investment, Risk & Reinsurance: Total revenues of $314 million was up 12% from the prior-year quarter’s number. Operating margin was 9.1%.

Benefits Delivery & Administration: Total revenues of $595 million soared 53% year over year. Operating margin was 52.4%.

Financial Update

Cash and cash equivalents decreased 14.1% to $887 million from the 2018-end level.

Long-term debt increased 20.8% from the level at 2018 end to nearly $5.3 billion at the reported quarter-end.

Shareholders’ equity increased 4% from the level on Dec 31, 2018 to $10.4 billion as of Dec 31, 2019.

For 2019, cash from operations declined 16% year over year to $1.08 billion.

For the same period, free cash flow was $835 million, down 18% year over year.

The company bought back shares worth $3 million in the quarter under review.

Full-Year Update

For the full year, the company repurchased shares worth $150 million.

For the year ended Dec 31, 2019, revenues were $9.04 billion, up 6% year over year.

Adjusted earnings per share came in at $10.96, up 12.6% year over year.

Zacks Rank

Willis Towers carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Insurers

Among other players from the insurance industry having reported fourth-quarter earnings so far, the bottom-line results of Brown & Brown, Inc. BRO and RLI Corp. RLI beat the respective Zacks Consensus Estimate while that of Principal Financial PFG matched the same.

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Willis Towers Watson Public Limited Company (WLTW) : Free Stock Analysis Report
 
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