Summary
Marsh & McLennan Companies, Inc. (MMC) reported a significant turnaround in its first quarter of 2009, moving from a net loss of $210 million in the prior year to a net income of $176 million. This improvement was largely driven by the absence of a substantial goodwill impairment charge that impacted the first quarter of 2008. Consolidated revenue declined by 13% to $2.63 billion, reflecting the challenging economic environment and foreign currency headwinds, although underlying revenue showed a more modest decline of 4%. Despite the revenue decline, the company demonstrated strong cost management, with operating expenses decreasing by 27%. The Risk and Insurance Services segment, driven by Marsh and Guy Carpenter, showed resilience with operating income increasing to $297 million from $234 million, though revenue experienced an 8% decline. The Consulting segment saw a more pronounced revenue decrease of 16% and a drop in operating income. The company also initiated new restructuring actions, primarily at Marsh, to further optimize costs. Investors should note the ongoing legal proceedings and contingent liabilities, which remain a significant factor to monitor.
Financial Highlights
30 data points| Revenue | $2.61B |
| Operating Expenses | $2.29B |
| Operating Income | $324.00M |
| Interest Expense | $56.00M |
| Net Income | $176.00M |
| EPS (Basic) | $0.33 |
| EPS (Diluted) | $0.33 |
| Shares Outstanding (Basic) | 515.00M |
| Shares Outstanding (Diluted) | 515.00M |
Key Highlights
- 1Reported Net Income of $176 million for Q1 2009, a significant improvement from a Net Loss of $210 million in Q1 2008, largely due to the absence of a $425 million goodwill impairment charge.
- 2Consolidated revenue decreased 13% to $2.63 billion, with underlying revenue down 4%, reflecting challenging economic conditions.
- 3Operating expenses decreased by 27%, a positive sign of cost management, with a significant portion attributable to the prior year's goodwill impairment.
- 4The Risk and Insurance Services segment showed an increase in operating income to $297 million, despite an 8% revenue decline.
- 5The Consulting segment experienced a revenue decline of 16% and a drop in operating income, impacted by adverse economic and financial market conditions.
- 6Initiated new restructuring actions, primarily at Marsh, involving approximately 320 positions, with expected annualized cost savings of $27 million.
- 7Maintains a solid liquidity position with $1.41 billion in cash and cash equivalents and an undrawn $1.2 billion multi-currency revolving credit facility.