Summary
Marsh & McLennan Companies, Inc. (MRSH) reported financial results for the second quarter and first six months of 2019, a period significantly impacted by the acquisition of Jardine Lloyd Thompson Group plc (JLT) on April 1, 2019. Revenue for the second quarter increased by 16% to $4.3 billion, and for the first six months by 9% to $8.4 billion, driven by underlying growth and the inclusion of JLT's operations. However, net income attributable to the company decreased due to higher interest expenses related to JLT financing and significant integration and restructuring costs. Operating income saw mixed results, with a slight decrease in the second quarter but a modest increase in the six-month period, as strong underlying business performance was largely offset by substantial costs associated with integrating JLT and other restructuring initiatives. The company's balance sheet reflects the impact of the JLT acquisition, with significant increases in goodwill and intangible assets, as well as higher long-term debt. Despite these integration costs and higher debt levels, the company continues to return capital to shareholders through dividends and share repurchases, demonstrating a focus on shareholder value alongside strategic expansion.
Financial Highlights
51 data points| Revenue | $4.35B |
| Operating Expenses | $3.67B |
| Operating Income | $680.00M |
| Interest Expense | $141.00M |
| Net Income | $344.00M |
| EPS (Basic) | $0.66 |
| EPS (Diluted) | $0.65 |
| Shares Outstanding (Basic) | 507.00M |
| Shares Outstanding (Diluted) | 512.00M |
Key Highlights
- 1Second quarter revenue increased 16% to $4.3 billion, and six-month revenue increased 9% to $8.4 billion, boosted by the acquisition of JLT and underlying business growth.
- 2Net income attributable to the company decreased for both the second quarter ($332 million vs. $531 million in 2018) and the first six months ($1,048 million vs. $1,221 million in 2018) primarily due to increased interest expenses and integration/restructuring costs.
- 3Operating income for the second quarter decreased slightly by 2% to $680 million, while the six-month operating income increased by 1% to $1.6 billion, reflecting the dilutive impact of acquisition-related costs on short-term profitability.
- 4The company incurred significant integration and restructuring costs related to the JLT acquisition, totaling $98 million in the second quarter and $134 million year-to-date, impacting profitability.
- 5Long-term debt increased substantially to $11.5 billion as of June 30, 2019, up from $5.5 billion at December 31, 2018, largely due to financing the JLT acquisition.
- 6Goodwill and other intangible assets saw a significant rise, reflecting the $4.9 billion of goodwill acquired as part of the JLT transaction, indicating strategic expansion.
- 7The company continued to return capital to shareholders, repurchasing $100 million in stock in the first six months of 2019 and paying dividends of $422 million.