Summary
Marsh & McLennan Companies, Inc. (MRSH) reported solid financial results for the second quarter and the first six months of 2012, demonstrating year-over-year growth in both revenue and operating income. The company's Risk and Insurance Services segment, driven by Marsh and Guy Carpenter, showed a 5% increase in revenue for the quarter and 6% for the six-month period, with particularly strong performance in Latin America and Asia Pacific. The Consulting segment, comprising Mercer and Oliver Wyman Group, also saw revenue growth, up 2% for the quarter and 3% for the six-month period, with underlying growth indicating continued client demand. Financially, the company improved its operating income by 11% in the second quarter and 11.5% for the first six months. Diluted earnings per share from continuing operations were $0.60 for the quarter and $1.23 for the six-month period, showing an increase from the prior year. The company also continued its strategic acquisitions, adding several businesses to its Risk and Insurance Services and Consulting segments, indicating a focus on expanding its service offerings and market reach. Despite some increases in operating expenses, largely due to incentive compensation and acquisitions, the company managed its costs effectively, leading to improved profitability.
Key Highlights
- 1Consolidated revenue increased by 3% to $3.0 billion for the second quarter of 2012 and by 5% to $6.1 billion for the first six months, compared to the prior year.
- 2Operating income grew by 11% to $518 million in the second quarter and by 11.5% to $1.045 billion for the first six months, indicating improved profitability.
- 3Risk and Insurance Services segment revenue grew 5% in Q2 and 6% year-to-date, with strong underlying revenue growth in international markets.
- 4Consulting segment revenue increased 2% in Q2 and 3% year-to-date, with underlying growth reflecting demand across key service lines.
- 5Diluted earnings per share from continuing operations were $0.60 for Q2 2012, up from $0.50 in Q2 2011.
- 6The company completed several strategic acquisitions in both its Risk and Insurance Services and Consulting segments during the period, demonstrating a commitment to inorganic growth.
- 7The company repurchased $100 million of its common stock during the second quarter, underscoring a commitment to returning capital to shareholders.