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MARSH & MCLENNAN COMPANIES, INC. 8-K Report, Financial Results (Oct 17, 2024)

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed October 17, 2024
Period End
October 17, 2024
Securities
MRSHMMC
In the record · 2016–202610-K1110-Q338-K115

MRSH filed 11 annual reports (10-K), 33 quarterly reports (10-Q) and 115 current reports (8-K) between 2016 and 2026.

  1. Material agreement8-K · Mar ’18Mar ’18
  2. Leadership change8-K · Mar ’20Mar ’20
  3. Leadership change8-K · Mar ’22Mar ’22
  4. Material agreement8-K · Jun ’26Jun ’26

01—Abstract

Summary

Summary of the 8-K filed October 17, 2024. Cited figures are marked; the original filing is the authoritative source.

Marsh & McLennan (NYSE: MMC) reported third-quarter 2024 results on October 17, 2024, with GAAP revenue up 6% to $5.7 billiona and underlying revenue up 5%.

GAAP operating income rose 11% to $1.1 billionb and adjusted operating income rose 12% to $1.2 billion. GAAP diluted EPS increased 3% to $1.51, while adjusted EPS rose 4% to $1.63. Management noted that the prior-year adjusted EPS base included a 10-cent discrete tax benefit, so adjusted EPS growth would have been roughly 11% excluding that item.

For the nine months, GAAP diluted EPS rose 10% to $6.59c and adjusted EPS rose 10% to $6.93, with underlying revenue growth of 7%. The segment picture was mixed. Risk & Insurance Services grew underlying revenue 6% in the quarter, led by Marsh at 7% underlying growth and Guy Carpenter at 7%.

Consulting grew underlying revenue 4%, with Mercer at 5% (Health up 8%, Wealth up 4%, Career up 5%) and Oliver Wyman at only 1%. Adjusted operating margin for the consolidated company was 22.4%, versus 21.3% a year earlier, an improvement of roughly 110 basis points. The company also repurchased $300 milliond of stock in the quarter and $900 million year to date.

The most significant strategic item is the agreement, signed September 29, 2024, to acquire McGriff Insurance Services for $7.75 billion in cash, funded by a mix of cash on hand and debt. McGriff generated about $1.3 billion of trailing twelve-month revenue, and the company expects to assume a deferred tax asset of about $500 million.

The deal is targeted to close by year-end, subject to regulatory clearance. Investors will want to watch the leverage impact, integration execution, and whether the acquisition meets its stated benefits, as the company itself flags these as forward-looking risks.

02—Key points

Key Highlights

  1. GAAP revenue rose 6% to $5.7 billion in Q3 2024 (5% underlying); nine-month revenue reached $18.4 billion, up 7%.
  2. Q3 GAAP diluted EPS increased 3% to $1.51 and adjusted EPS increased 4% to $1.63; management says adjusted EPS growth was about 11% excluding a 10-cent prior-year tax benefit.
  3. Nine-month GAAP diluted EPS rose 10% to $6.59 and adjusted EPS rose 10% to $6.93.
  4. Risk & Insurance Services underlying revenue grew 6% in Q3, with Marsh up 7% and Guy Carpenter up 7%; Consulting grew 4%, with Mercer up 5% and Oliver Wyman up only 1%.
  5. Adjusted operating margin expanded to 22.4% in Q3 from 21.3% a year earlier, roughly 110 basis points of improvement.
  6. Agreed to acquire McGriff Insurance Services for $7.75 billion in cash (funded by cash and debt), targeting closing by year-end 2024, subject to regulatory clearance; McGriff had about $1.3 billion of trailing revenue.
  7. Repurchased $300 million of shares in Q3 and $900 million year to date, and shareholders received dividends of $1.11 billion over the nine months.

03—Questions

Frequently Asked Questions

  1. What was the main driver of Marsh McLennan's Q3 2024 results?

    Growth was broad-based but led by Risk & Insurance Services, where Marsh and Guy Carpenter each grew underlying revenue 7%. Mercer grew 5% underlying, and Oliver Wyman lagged at 1%. Consolidated adjusted operating income rose 12% to $1.2 billion, reflecting both revenue growth and margin expansion.

  2. How significant is the McGriff acquisition?

    The $7.75 billion cash deal is large relative to the company's recent acquisition activity. McGriff contributed about $1.3 billion of revenue over the trailing twelve months, and the company expects to assume a deferred tax asset of about $500 million. The purchase will be funded through a mix of cash and new debt, so it will raise leverage. The transaction is expected to close by year-end, subject to regulatory approval.

  3. Did earnings growth reflect underlying performance or one-time items?

    Management highlighted that adjusted EPS growth of 4% in Q3 was held back by a one-time 10-cent tax benefit in the prior-year period. Excluding that benefit, adjusted EPS growth would have been about 11%. GAAP EPS growth of 3% is also affected by the same comparison. Nine-month EPS growth of 10% is a cleaner read on the trend.

  4. What are the key risks flagged in the release?

    The company's forward-looking statements cite macroeconomic and geopolitical conditions, including wars and Middle East tensions, litigation over errors and omissions, cyber threats, regulatory and sanctions compliance, tax law changes, and competitive pressure including from AI. It also specifically flags the risk of failing to integrate McGriff or achieve its intended benefits.

  5. Is the company returning capital to shareholders?

    Yes. The company repurchased $300 million of stock in Q3 and $900 million year to date, reducing shares outstanding to 491 million at September 30, 2024, from 493 million a year earlier. Dividends paid over the nine months totaled $1.11 billion, up from $944 million in the prior-year period, and a $401 million dividend was payable at quarter-end.

04—Continue

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