Summary
Marsh & McLennan Companies, Inc. (MRSH) reported strong first-quarter 2011 results, with consolidated revenue increasing by 9% to $2.9 billion and operating income rising 11% to $472 million year-over-year. This growth was primarily driven by solid performance in both the Risk and Insurance Services and Consulting segments, with underlying revenue increasing by 5% overall. The company also benefited from a favorable effective tax rate due to the settlement of an IRS audit, which, when excluded, still shows underlying operational strength. Investments in strategic acquisitions, particularly within the Marsh & McLennan Agency segment, are contributing to revenue growth and expanding market share.
Financial Highlights
49 data pointsBeta
Financial Statements
Beta
| Revenue | $2.88B |
| Operating Expenses | $2.41B |
| Operating Income | $472.00M |
| Interest Expense | $51.00M |
| Net Income | $325.00M |
| EPS (Basic) | $0.59 |
| EPS (Diluted) | $0.58 |
| Shares Outstanding (Basic) | 544.00M |
| Shares Outstanding (Diluted) | 552.00M |
Key Highlights
- 1Consolidated revenue grew 9% to $2.9 billion, with underlying revenue up 5% year-over-year.
- 2Operating income increased 11% to $472 million, driven by strong performance in both Risk and Insurance Services and Consulting segments.
- 3Risk and Insurance Services revenue grew 10% (4% underlying), with Marsh and Guy Carpenter showing positive momentum.
- 4Consulting segment revenue rose 9% (6% underlying), supported by growth in Mercer and Oliver Wyman.
- 5The company benefited from an effective tax rate reduction due to IRS audit settlement, though underlying operational performance remains robust.
- 6Acquisitions in the Marsh & McLennan Agency initiative are contributing to revenue growth and market expansion.
- 7Net income attributable to the company increased to $325 million, or $0.58 per diluted share, from $248 million, or $0.45 per diluted share, in the prior year's quarter.
Frequently Asked Questions
Revenue growth was primarily driven by increases in both the Risk and Insurance Services segment (up 10% to $1.63 billion) and the Consulting segment (up 9% to $1.26 billion). On an underlying basis, excluding currency impacts and acquisitions/dispositions, revenue increased by 5% overall, with Risk and Insurance Services up 4% and Consulting up 6%.
The company continued to execute its acquisition strategy, with several acquisitions made in the Risk and Insurance Services segment in early 2011, such as RJF Agencies and Hampton Roads Bonding, contributing to revenue growth. The filing notes that acquisitions accounted for a 7% increase in Marsh's revenue and a 2% increase in Mercer's revenue in the first quarter.
The company reported an effective tax rate of 28.6% for the first quarter of 2011, which included a benefit from the settlement of an IRS audit. Excluding this benefit, the effective tax rate was 31.6%. The company anticipates that the effective tax rate will continue to be variable but expects the degree of variation to moderate.
The company used $128 million in net financing activities during the first quarter of 2011, primarily for dividend payments ($117 million). There were no borrowings outstanding under its $1.0 billion revolving credit facility. Long-term debt remained substantial at $2.77 billion, with the company actively managing its debt structure, including hedging interest rate risk on a portion of its senior notes.