Summary
Marsh & McLennan Companies (MMC) reported strong financial results for the nine months ended September 30, 2007, largely driven by a significant gain from the sale of its Putnam Investments segment. This divestiture, along with other strategic exits in 2006, has reshaped the company's business profile, moving it away from investment management. Operating performance showed mixed results, with revenue growth across segments but a decline in operating income for the Risk and Insurance Services segment due to increased expenses. The Consulting segment, however, demonstrated robust growth. The company also continued its share repurchase program, signaling confidence and a commitment to returning capital to shareholders. Investors should note the ongoing legal and regulatory matters, which, while substantial, are being managed and provisioned for, but continue to present a risk factor.
Key Highlights
- 1Reported a significant net income of $2.39 billion for the nine months ended September 30, 2007, heavily influenced by a $1.9 billion after-tax gain from the sale of Putnam Investments.
- 2Operating revenue grew by 7% to $8.425 billion for the nine months ended September 30, 2007, with the Consulting segment showing strong 14% revenue growth.
- 3Operating income for the nine months ended September 30, 2007, was $854 million, a slight increase from the prior year, but operating income in the Risk and Insurance Services segment declined significantly.
- 4The company actively repurchased shares, with accelerated share repurchase programs totaling $1.3 billion completed or initiated during the first nine months of 2007.
- 5Balance sheet shows a strong cash position of $2.819 billion as of September 30, 2007.
- 6The company is actively managing ongoing litigation and regulatory matters, with significant disclosures detailing various claims and investigations.
- 7Effective tax rate for the nine months ended September 30, 2007, was 36%, compared to 28% in the prior year, impacted by international tax law changes.