Summary
Marsh & McLennan Companies, Inc. (MMC) reported its third-quarter and nine-month results for the period ending September 30, 2010. The company demonstrated revenue growth across its primary segments, Risk and Insurance Services and Consulting, with a notable increase in consolidated revenue of 7% for the quarter. A significant event during the nine-month period was the sale of its Kroll business for $1.13 billion, which, alongside other dispositions and strategic acquisitions, reshaped the company's operational landscape. While overall operating income for the nine months saw a decrease compared to the prior year, largely due to a substantial settlement charge in the Consulting segment (Mercer), underlying operational performance excluding this charge showed improvement. The company also highlighted its proactive debt management and a new $500 million share repurchase program, indicating a focus on returning value to shareholders and maintaining financial flexibility. Despite facing ongoing market challenges and legal proceedings, MMC's diversified business model and strategic acquisitions in core areas like insurance broking and HR consulting positioned it for continued resilience. Investors should note the impact of the large Mercer settlement on year-to-date profitability, the ongoing integration of recent acquisitions, and the company's strategic focus on core service offerings following the Kroll divestiture. The company's liquidity remains adequate, supported by operating cash flows and revolving credit facilities.
Financial Highlights
48 data points| Revenue | $2.52B |
| Operating Expenses | $2.29B |
| Operating Income | $239.00M |
| Interest Expense | $60.00M |
| Net Income | $168.00M |
| EPS (Basic) | $0.30 |
| EPS (Diluted) | $0.30 |
| Shares Outstanding (Basic) | 543.00M |
| Shares Outstanding (Diluted) | 548.00M |
Key Highlights
- 1Consolidated revenue increased by 7% to $2.524 billion in Q3 2010 compared to Q3 2009, driven by growth in both Risk & Insurance Services and Consulting segments.
- 2The company completed the sale of its Kroll business on August 3, 2010, for $1.13 billion in cash, with its results reported under discontinued operations.
- 3Operating income for the nine months ended September 30, 2010, decreased to $614 million from $806 million in the prior year, significantly impacted by a $400 million settlement charge in the Consulting segment (Mercer).
- 4Risk and Insurance Services segment revenue grew 8% year-over-year in Q3, with Marsh showing a 9% increase and Guy Carpenter a 4% increase.
- 5Consulting segment revenue increased by 5% in Q3, with Mercer up 6% and Oliver Wyman Group up 3%.
- 6MMC implemented a new $500 million share repurchase program in September 2010.
- 7Total operating expenses increased by 6% in Q3, reflecting acquisition impacts and underlying expense growth, partially offset by foreign exchange impacts.