Marsh & McLennan Companies Inc. Reports Operating Results (10-Q)
Marsh & Mclennan Companies Inc. has a market cap of $11.99 billion; its shares were traded at around $22.53 with a P/E ratio of 14.2 and P/S ratio of 1.2. The dividend yield of Marsh & Mclennan Companies Inc. stocks is 3.6%.MMC is in the portfolios of Arnold Van Den Berg of Century Management, PRIMECAP Management, Brian Rogers of T Rowe Price Equity Income Fund, Diamond Hill Capital of Diamond Hill Capital Management Inc, Charles Brandes of Brandes Investment, Jim Simons of Renaissance Technologies LLC, Steven Cohen of SAC Capital Advisors, Murray Stahl of Horizon Asset Management, Manning & Napier Advisors, Inc, Dodge & Cox, Chuck Royce of Royce& Associates.
Highlight of Business Operations: Revenue in the Risk and Insurance Services segment for the first quarter of 2010 increased 9% from the same period in 2009, and was flat on an underlying basis. Within the Risk and Insurance Services segment, a 1% increase in underlying revenue at Guy Carpenter was offset by a 35% decline in fiduciary interest income. Consulting revenue increased 7%, resulting from increases of 6% in Mercer and 10% in Oliver Wyman. On an underlying basis, Consulting revenue increased 1% reflecting an increase of 6% in Oliver Wyman, partly offset by a 1% decline at Mercer. Revenue decreased 3% in Risk Consulting & Technology or 2% on an underlying basis, reflecting decreases in background screening and risk mitigation and response of 9% and 11%, respectively, partly offset by an 8% increase for litigation support and data recovery.
Consolidated operating expense in the first quarter of 2010 increased 3% from the same period in 2009. This reflects a 5% increase due to the impact of foreign exchange and a 1% increase due to the impact of acquisitions, partly offset by a 4% decline in underlying expense. The decrease in underlying expense reflects lower legal and regulatory expenses as well as a decline in restructuring expenses, partly offset by higher pension related expenses.
In Marsh, revenue in the first quarter of 2010 was $1.2 billion, an increase of 8% from the same quarter of the prior year resulting from the impact of foreign currency translation and acquisitions. Revenue was flat on an underlying basis, reflecting the economic environment and the downward pressure on commercial insurance premium rates. Despite these difficult market conditions, Marsh increased revenues in many areas of the world. Underlying revenue increases of 1% in the U.S. / Canada, 3% in Latin America, and 2% in Asia Pacific were offset by a 1% decrease in EMEA.
Guy Carpenters revenue increased 12% to $315 million in the first quarter of 2010 compared with the same period in 2009, or 1% on an underlying basis. The increase in underlying revenue was primarily due to continued strong new business. In April 2009, Guy Carpenter acquired John B. Collins Associates, Inc., previously the fifth-largest reinsurance intermediary in the U.S. and seventh-largest in the world. In October 2009, Guy Carpenter completed the acquisition of London-based specialty reinsurance broker Rattner Mackenzie Limited from HCC Insurance Holdings, Inc.
Expenses in the Risk and Insurance Services segment increased 6% in the first quarter of 2010, compared with the same period in the prior year reflecting a 5% increase related to the impact of foreign currency and a 3% increase from acquisitions, partly offset by a 2% decline in underlying expenses. The decline in underlying expenses reflects lower severance related restructuring activities partly offset by higher pension related expenses.
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