Summary
Marsh & McLennan Companies, Inc. (MRSH) reported strong financial performance for the second quarter and first six months of 2016, demonstrating growth in revenue and operating income. Consolidated revenue for the second quarter increased by 5% year-over-year to $3.4 billion, with an underlying increase of 3%. For the first six months, revenue grew 4% to $6.7 billion on both a reported and underlying basis. The company also saw a significant increase in diluted net income per share from continuing operations, rising 17% to $0.90 in the second quarter. This robust performance was driven by solid contributions from both the Risk and Insurance Services and Consulting segments, with positive underlying revenue growth across most business lines, despite some headwinds from foreign currency translation and specific regional market conditions. The company continued its strategic growth through acquisitions, completing five acquisitions in the first half of 2016 across both its segments. Management's discussion highlights investments in talent and compensation as drivers for expense increases, alongside amortization of intangible assets, which were partially offset by decreased pension expenses. Marsh & McLennan also actively managed its capital structure, repurchasing shares and paying dividends, while maintaining a strong liquidity position with no significant borrowings under its revolving credit facility. The company's outlook suggests continued focus on underlying revenue growth and operational efficiency.
Financial Highlights
51 data points| Revenue | $3.38B |
| Operating Expenses | $2.65B |
| Operating Income | $726.00M |
| Interest Expense | $48.00M |
| Net Income | $472.00M |
| EPS (Basic) | $0.91 |
| EPS (Diluted) | $0.90 |
| Shares Outstanding (Basic) | 521.00M |
| Shares Outstanding (Diluted) | 525.00M |
Key Highlights
- 1Consolidated revenue increased 5% to $3.4 billion in Q2 2016 and 4% to $6.7 billion in the first six months of 2016.
- 2Diluted net income per share from continuing operations rose 17% to $0.90 in Q2 2016 compared to $0.77 in Q2 2015.
- 3Risk and Insurance Services revenue grew 6% to $1.8 billion in Q2 2016, with underlying revenue up 2%.
- 4Consulting segment revenue increased 4% to $1.5 billion in Q2 2016, with underlying revenue up 5%.
- 5The company completed five acquisitions in the first six months of 2016, contributing to revenue growth.
- 6Operating expenses increased by 2% in Q2 2016, primarily due to higher compensation and amortization costs, offset by lower pension expenses.
- 7Shareholder returns were supported by $425 million in share repurchases and $326 million in dividends paid during the first six months of 2016.