Summary
Marsh & McLennan Companies, Inc. (MMC) reported a strong third quarter and first nine months of 2002, demonstrating significant year-over-year growth in revenue and operating income. The Risk and Insurance Services segment was a key driver of this growth, benefiting from increased commercial insurance premium rates and net new business. Despite a challenging market, this segment showed robust underlying revenue growth. The Investment Management segment, however, experienced a decline in revenue and operating income due to a significant decrease in assets under management, largely attributed to market downturns and net fund redemptions. The Consulting segment showed modest revenue growth. The company also reported a substantial increase in cash generated from operations and maintained a solid liquidity position.
Key Highlights
- 1Total revenue increased by 6% for the third quarter and 3% for the nine months ended September 30, 2002, compared to the prior year.
- 2Operating income saw a significant increase, up 67% for the third quarter and 19% for the nine months, driven by strong performance in Risk and Insurance Services.
- 3The Risk and Insurance Services segment reported a 17% revenue increase in Q3 2002, fueled by higher commercial insurance rates and new business.
- 4The Investment Management segment's revenue declined by 15% in Q3 2002 due to a 19% decrease in average assets under management.
- 5MMC generated $1.3 billion in net cash from operations for the nine months ended September 30, 2002, a substantial increase from $872 million in the prior year.
- 6The company repurchased approximately 24 million shares of common stock for $1.2 billion during the first nine months of 2002.
- 7Goodwill amortization was discontinued effective January 1, 2002, in accordance with SFAS No. 142, impacting reported earnings per share calculations.