Summary
Marsh & McLennan Companies (MMC) reported a strong rebound in its third quarter of 2009, with operating income increasing significantly to $216 million from $64 million in the prior year. This improvement was driven by a robust recovery in the Risk and Insurance Services segment, which saw operating income turn positive at $127 million, a substantial increase from a loss in the prior year. The Consulting segment, however, experienced a decline in operating income to $105 million from $157 million, reflecting ongoing challenges in the market. Despite revenue declines across most segments, the company demonstrated effective cost management, with consolidated operating expenses decreasing 16% year-over-year. For the nine months ended September 30, 2009, operating income, excluding goodwill impairment charges, showed a significant increase, highlighting the company's underlying operational strength. The company also continued to manage its portfolio through strategic acquisitions in its Risk and Insurance Services segment, notably acquiring International Advisory Services, Ltd. and Rattner Mackenzie Limited. Legal proceedings remain a significant area of focus, with several high-profile cases expected to go to trial in 2010, including the Alaska Retirement Management Board lawsuit and a securities class action. While these legal matters present potential financial risks, the company's improved operational performance and cost controls provide a more positive financial outlook for the period.
Financial Highlights
46 data points| Revenue | $2.35B |
| Operating Expenses | $2.16B |
| Operating Income | $195.00M |
| Interest Expense | $59.00M |
| Net Income | $225.00M |
| EPS (Basic) | $0.41 |
| EPS (Diluted) | $0.41 |
| Shares Outstanding (Basic) | 524.00M |
| Shares Outstanding (Diluted) | 526.00M |
Key Highlights
- 1Operating income for the third quarter of 2009 surged to $216 million, a significant improvement from $64 million in the prior year, driven by strong performance in the Risk and Insurance Services segment.
- 2The Risk and Insurance Services segment's operating income turned positive at $127 million, a substantial turnaround from a loss in the same period last year, reflecting effective cost management and revenue resilience.
- 3Consolidated operating expenses decreased by 16% year-over-year in the third quarter, demonstrating the company's success in controlling costs amidst a challenging economic environment.
- 4Despite overall revenue declines, the company made strategic acquisitions in its Risk and Insurance Services segment, including International Advisory Services, Ltd. and Rattner Mackenzie Limited, to enhance its market position.
- 5Goodwill impairment charges in the Risk Consulting & Technology segment decreased significantly to $0 in Q3 2009 from $540 million in Q3 2008, contributing to the improved net income.
- 6The company generated strong operating cash flows of $405 million for the first nine months of 2009, indicating healthy liquidity and financial flexibility.
- 7Several significant legal proceedings, including a major lawsuit by the Alaska Retirement Management Board and securities class actions, are slated for trial in 2010, representing ongoing material risks.