Summary
Marsh & McLennan Companies, Inc. (MRSH) reported a solid increase in revenue and operating income for the second quarter and first six months of 2011 compared to the same periods in 2010. The company saw robust growth in both its Risk and Insurance Services and Consulting segments, driven by strategic acquisitions and underlying business performance. Notably, the Risk and Insurance Services segment demonstrated strong revenue growth, with Marsh benefiting from expansion in Latin America and Guy Carpenter from global specialties. The Consulting segment, led by Mercer and Oliver Wyman Group, also showed positive top-line momentum. Despite some increased operating expenses related to compensation, pension costs, and acquisitions, the company's operating income improved significantly due to the absence of a large litigation settlement charge that impacted the prior year's results. Marsh & McLennan also actively managed its capital structure, including tendering for its own debt and continuing share repurchases. Investors should note the ongoing integration of acquired businesses and the company's focus on underlying revenue growth as key drivers for future performance.
Financial Highlights
50 data points| Revenue | $2.93B |
| Operating Expenses | $2.46B |
| Operating Income | $465.00M |
| Interest Expense | $49.00M |
| Net Income | $289.00M |
| EPS (Basic) | $0.51 |
| EPS (Diluted) | $0.50 |
| Shares Outstanding (Basic) | 547.00M |
| Shares Outstanding (Diluted) | 555.00M |
Key Highlights
- 1Consolidated revenue increased 12% to $2.9 billion in Q2 2011 and 11% to $5.8 billion in the first six months of 2011 year-over-year.
- 2Operating income significantly improved to $465 million in Q2 2011 and $937 million in the first six months of 2011, compared to an operating loss of $50 million and operating income of $375 million, respectively, in the prior year periods.
- 3Risk and Insurance Services segment revenue grew 11% in Q2 2011 and 10% in the first six months of 2011, with underlying revenue growth of 5% in both periods.
- 4Consulting segment revenue increased 13% in Q2 2011 and 11% in the first six months of 2011, with underlying revenue growth of 5% and 6%, respectively.
- 5The company repurchased approximately 7.8 million shares of common stock in Q2 2011 for $235 million.
- 6The company commenced tender offers to purchase up to $500 million of its outstanding notes due 2014 and 2015, and completed the purchase of $600 million in notes on July 15, 2011.
- 7The effective tax rate for Q2 2011 was 31.1%, and for the first six months of 2011 was 29.8%, which included a tax benefit from an IRS audit settlement.