Marsh Posts Fourth-Quarter Net Income Decline of 62%
One of the world's largest insurance brokers, Marsh & McLennan Cos.reported that fourth-quarter net income fell 62%, reflecting continuing weakness. The brokerage reported net income of $85 million, or 16 cents a share, compared to $226 million, or 40 cents a share, a year earlier.
Excluding special items, largely restructuring and legal costs, earnings from continuing operations fell to 25 cents a share from 29 cents. Revenue increased 8.1% to $2.93 billion from $2.71 billion. The mean estimates of analysts surveyed by Thomson Financial were for earnings of 31 cents a share on revenue of $2.82 billion.
Earnings at Marsh's risk and insurance business fell 54%, which the company blamed on a revenue drop at its Risk Capital Holdings that cut per-share earnings by 8 cents a share. The risk and insurance segment's operating margin, which has severely trailed Marsh's rivals, slumped to 4.2%.
Marsh also reported that profits at its consulting firms were up 38%, as revenue jumped 19%.
The company hired a new chief executive last month and fired the head of the insurance brokerage unit in September over growing expenses, poor operating margins and weak revenue at the segment.
Published on February 12, 2008
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