Marsh & McLennan Companies reported $130 million for third-quarter net profit, down 23 percent from $168 million reported during the same period last year. But profit from continuing operations was up 4 percent as the firm continued to boost business revenues.
Third-quarter net profit was lowered because of a $72 million charge for the early repayment of some debts, an expense that the firm didn’t have last year.
The firm’s overall revenue was $2.8 billion, up 11 percent from $2.5 billion reported one year ago. Risk and insurance services revenue increased 11 percent to $1.5 billion. Its consulting revenue was also up 11 percent, to $1.3 billion.
“All of our businesses continued to generate revenue growth and double-digit growth in profitability,” said CEO Brian Duperreault.
“Marsh’s high client revenue retention rates and new business development produced underlying revenue growth across all geographies. Guy Carpenter produced strong results, continuing a long-term trend of underlying revenue growth.”
CEO Duperreault added Mercer’s underlying revenue growth has continued for more than a year. Oliver Wyman’s underlying revenue growth was broad-based across industry sectors, he said.
Risk and Insurance Services Divisions Results
Risk and insurance services revenue rose 11 percent to $1.5 billion in the third quarter. Operating income is up 31 percent to $186 million, compared with $142 million one year ago. For the first nine months of 2011, risk and insurance services revenue was $4.7 billion, up 11 percent from one year ago.
Marsh’s revenue in the third quarter was $1.2 billion, up 12 percent from a year ago. International operations reported underlying revenue growth of 8 percent, reflecting growth of 13 percent in both Asia Pacific and Latin America. In the United States/Canada division, underlying revenue grew 3 percent.
Guy Carpenter’s third-quarter revenue was $251 million, up 8 percent from a year ago. In August, Marsh said it signed an agreement to acquire the brokerage business of Alexander Forbes to expand Marsh’s presence in South Africa. The transaction is subject to regulatory and other approvals and is targeted for completion before the year’s end.
Consulting Divisions Results
Consulting revenue is up 11 percent to $1.3 billion compared to one year ago. Operating income increased 17 percent to $161 million. For the nine months of 2011, consulting revenue increased 11 percent to $3.9 billion.
Mercer’s revenue was $975 million, up 11 percent. Mercer’s consulting operations produced revenue of $673 million; outsourcing, with revenue of $186 million, was up 1 percent; and investment consulting and management, with revenue of $116 million, grew 10 percent. Oliver Wyman’s revenue rose 13 percent to $364 million.