Summary
Marsh & McLennan Companies, Inc. (MRSH) reported solid financial results for the first quarter ended March 31, 2015. While consolidated revenue saw a slight 1% decrease to $3.2 billion compared to the prior year, this was primarily due to a significant 6% negative impact from foreign currency translation. On an underlying basis, revenue grew 4%, indicating operational strength. The company's operating income increased by a healthy 9% to $735 million, driven by effective expense management, including a notable $125 million benefit from the termination of a retiree medical plan, which more than offset increased pension expenses. Diluted earnings per share from continuing operations rose 11% to $0.89. Key drivers of performance included a 3% underlying revenue growth in the Risk and Insurance Services segment, despite headwinds from currency, and a strong 5% underlying revenue increase in the Consulting segment. The company also actively managed its capital through share repurchases, spending $300 million in the quarter, and issued $500 million in new senior notes, demonstrating a proactive approach to its financial structure. Despite these positives, investors should note the impact of a strengthening U.S. dollar on reported international earnings and the ongoing sensitivity of pension expenses to interest rate fluctuations.
Financial Highlights
51 data points| Revenue | $3.21B |
| Operating Expenses | $2.48B |
| Operating Income | $735.00M |
| Interest Expense | $36.00M |
| Net Income | $482.00M |
| EPS (Basic) | $0.89 |
| EPS (Diluted) | $0.88 |
| Shares Outstanding (Basic) | 539.00M |
| Shares Outstanding (Diluted) | 545.00M |
Key Highlights
- 1Consolidated revenue was $3.2 billion, down 1% year-over-year, but underlying revenue grew 4%, indicating underlying business strength.
- 2Operating income increased 9% to $735 million, driven by expense control and a significant one-time benefit from a retiree medical plan termination.
- 3Diluted EPS from continuing operations grew 11% to $0.89, outpacing revenue growth.
- 4Risk and Insurance Services segment showed 3% underlying revenue growth, demonstrating resilience despite currency impacts.
- 5Consulting segment reported a strong 5% underlying revenue growth, highlighting expansion in services like Health, Talent, and Investments.
- 6The company repurchased $300 million of its common stock in the quarter, signaling confidence and returning capital to shareholders.
- 7Long-term debt increased due to the issuance of $500 million in new senior notes, while the company maintained access to a $1.2 billion revolving credit facility.