Marsh's Consulting Revenue Grew 8% Underlying, Risk And Insurance 3%, As Reinsurance Fell 6%
Third-quarter revenue rose 8%, or 5% underlying, while adjusted earnings per share rose 10% to $2.03.
Marsh, the company formerly named Marsh McLennan, reported third-quarter revenue of $6.9 billion, up 8% and up 5% on an underlying basis, in an 8-K filed Thursday. The growth was uneven: consulting outran insurance brokerage, and reinsurance revenue fell.
The finding: consulting led, reinsurance slipped
Underlying revenue strips out currency swings and the effect of acquisitions and disposals. On that basis, Consulting grew 8% in the quarter to $2.7 billion, while Risk and Insurance Services grew 3% to $4.2 billion.
Management Consulting was the fastest line, with revenue of $1.0 billion, up 14% on both a standard and underlying basis. People and Investments revenue was $1.7 billion, up 5% underlying. Within it, Investments and Retirement grew 8%, Health and Benefits 5%, and Workforce and Rewards fell 1%.
Inside Risk and Insurance Services, Risk revenue was $3.7 billion, up 10%, or 5% underlying. U.S./Canada grew 4% underlying and International 6%, including 7% in EMEA, 4% in Asia Pacific and flat in Latin America. Reinsurance revenue was $374 million, down 6% on both bases.
Earnings and the catch in the adjustments
Earnings per share were $1.69 on standard accounting. Adjusted earnings per share rose 10% to $2.03. Net income attributable to the company was $808 million.
Operating income rose 4% to $1.2 billion. Adjusted operating income, which excludes noteworthy items and intangible amortization, rose 6% to $1.5 billion.
The gap between the two measures is sizable. Noteworthy items totaled $170 million, including $144 million for the Greensill litigation, net of insurance recoveries, and $79 million of restructuring, which the company says primarily reflects its three-year Thrive program. A $126 million gain on consolidating an entity partly offset them.
For the nine months, standard earnings per share were $6.68 against $6.75 a year earlier, and operating income fell 3% to $4.9 billion. Adjusted earnings per share rose 9% to $8.29.
Buybacks, debt and the call
Marsh bought back about 2.7 million shares for $500 million in the quarter, and 11.4 million shares for $2.0 billion over nine months. It also repaid 550 million of euro-denominated senior notes that matured in September.
CEO John Doyle said Marsh "delivered a strong third quarter" and made "significant progress in executing our Thrive program." Management held its earnings call at 8:30 a.m. Eastern on Thursday.
Nine-month underlying revenue growth was 5% for the company, with Reinsurance down 1% and Management Consulting up 11%.
