Marsh & McLennan Q1 Earnings Beat on Strong Marsh, Guy Carpenter Units

Marsh & McLennan Companies, Inc. MMC reported first-quarter 2025 adjusted earnings per share of $3.06, which surpassed the Zacks Consensus Estimate by 1.3%. The bottom line advanced 5% year over year. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Consolidated revenues of $7.1 billion improved 9% year over year. The figure rose 4% on an underlying basis. However, the top line missed the consensus mark by 0.1%.

The quarterly results were aided by strong revenue growth in Risk and Insurance Services, particularly from Marsh and Guy Carpenter business. Increased profits from the Consulting segment also contributed to the upside. However, the upside was partly offset by elevated operating expenses, primarily due to increased compensation and benefits.

Marsh & McLennan Companies, Inc. Price, Consensus and EPS Surprise

Marsh & McLennan Companies, Inc. price-consensus-eps-surprise-chart | Marsh & McLennan Companies, Inc. Quote

MMC’s Q1 Performance

Total operating expenses escalated 11.2% year over year to $5.1 billion, higher than our model estimate of $4.8 billion. The year-over-year rise was due to increased compensation and benefits costs and other operating expenses. Expenses of the Risk and Insurance Services segment escalated 16.3% year over year, while the Consulting segment’s expenses increased 4.3% year over year. 

Marsh & McLennan’s adjusted operating income improved 8% year over year to $2.2 billion but fell slightly short of our estimate of $2.3 billion. Adjusted operating margin of 31.8% deteriorated 20 basis points year over year.

Q1 Segmental Update

Risk and Insurance Services

The segment recorded revenues of $4.76 billion in the first quarter, which rose 11% year over year and 4% on an underlying basis. The reported figure missed the Zacks Consensus Estimate of $4.78 billion but beat our estimate of $4.68 billion. Adjusted operating income advanced 8% year over year to $1.8 billion, which came higher than the consensus mark of $1.76 billion. 

Revenues of Marsh, a unit within the segment, rose 15% year over year and 5% on an underlying basis to $3.5 billion. The reported figure marginally beat the Zacks Consensus Estimate and our estimate of $3.37 billion. In the United States/Canada operations, revenues grew 4% on an underlying basis. International operations also witnessed revenue growth of 6% year over year. Among the international operations, Latin America witnessed a year-over-year increase of 8%. Asia Pacific and EMEA’s revenues improved 4% and 6%, respectively, on an underlying basis. 

Another unit within the segment, Guy Carpenter's revenues of $1.21 billion rose 5% year over year and on an underlying basis. However, the figure missed the consensus mark of $1.22 billion.

Consulting

The unit’s revenues advanced 5% year over year and 4% on an underlying basis to $2.31 billion. The reported figure lagged the Zacks Consensus Estimate of $2.32 billion and our estimate of $2.36 billion. Adjusted operating income of $491 million climbed 8% year over year and came higher than the consensus mark of $469 million. 

Revenues of Mercer, a unit within this segment, grew 5% year over year and 4% on an underlying basis to $1.5 billion. The reported figure marginally beat the Zacks Consensus Estimate. Health and Wealth revenues rose 7% and 3%, respectively, on an underlying basis. However, Career revenues dipped 1% year over year.

Another unit within the segment, Oliver Wyman, recorded revenues of $818 million, which improved 4% year over year as well as on an underlying basis. However, the metric fell short of the consensus mark of $836 million and our estimate of $883.7 million.

Financial Update (as of March 31, 2025)

Marsh & McLennan exited the first quarter with cash and cash equivalents of $1.6 billion, which tumbled 33.1% from the 2024-end figure. Total assets of $57 billion inched up 0.9% from the figure at 2024-end. 

Long-term debt amounted to $18.9 billion, which slipped 2.9% from the figure as of Dec. 31, 2024. Short-term debt amounted to $1.7 billion.

Total equity of $14.3 billion advanced 5.4% from the 2024-end level.

Marsh & McLennan used net cash of $622 million in operations during the first quarter. Cash used in operations amounted to $781 million in the prior-year quarter. 

Capital Deployment Update

Marsh & McLennan bought back 1.3 million shares worth $300 million in the first quarter.

MMC’s Zacks Rank

Marsh & McLennan currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Another Insurer

Of the insurance industry players that have reported first-quarter 2025 results so far, the bottom-line result of The Travelers Companies, Inc. TRV beat the respective Zacks Consensus Estimate.

Travelers reported first-quarter 2025 core income of $1.91 per share, which beat the Zacks Consensus Estimate of 69 cents. The bottom line, however, declined 29.3% year over year. Travelers’ total revenues increased 6.1% from the year-ago quarter to $11.9 billion. The top-line figure, however, missed the consensus estimate of $12.1 billion. Net written premiums increased 3% year over year to a record $10.5 billion.  Net investment income increased 9.9% year over year to $930 million. 

Travelers witnessed an underwriting loss of $305 million against a $577 million gain in the year-ago quarter.  Underlying underwriting income of $1.6 billion improved more than 30% year over year, driven by strong net earned premiums. The consolidated underlying combined ratio of 84.8 improved 290 bps year over year. The Business Insurance segment’s net written premiums increased 2% year over year to about $5.7 billion. Income in the Bond & Specialty Insurance segment was $220 million, which increased 12.8% year over year.

Upcoming Earnings Releases

Here are two other companies from the insurance space that are set to report their respective quarterly earnings soon.

Brown & Brown, Inc. BRO has an Earnings ESP of +0.77% and a Zacks Rank #2 (Buy) at present. The Zacks Consensus Estimate for BRO’s first-quarter 2025 earnings is pinned at $1.30 per share, implying a 14% rise from the year-ago quarter’s figure.

Brown & Brown’s earnings beat estimates in each of the trailing four quarters, the average surprise being 8.18%.

CNO Financial Group, Inc. CNO currently has an Earnings ESP of +1.69% and a Zacks Rank of 3. The Zacks Consensus Estimate for CNO’s first-quarter 2025 earnings is pegged at 79 cents per share, indicating a 51.9% surge from the year-ago quarter’s number.

CNO Financial’s earnings beat estimates in three of the trailing four quarters and missed the mark once, the average surprise being 20.41%.

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