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Marsh & McLennan results down for the quarter


Marsh & McLennan Cos. Inc.'s second-quarter 2015 revenue dropped 2.1% from the same period a year earlier to $3.23 billion, the company announced Tuesday morning.

The company posted net income for the second quarter of $419 million, a 2.8% drop from that of the same three months in 2014.

Revenue for Marsh L.L.C., the company's insurance brokerage and risk consulting unit, fell 1.3% to $1.47 billion. Revenue from Marsh's U.S. and Canadian operations, however, grew 6.1% to $760 million.

Second-quarter revenue from its Guy Carpenter & Co. L.L.C. reinsurance brokerage unit fell 6.8% year-over-year to $275 million.

Marsh & McLennan's Mercer L.L.C. benefits consulting operation's revenue in the second quarter dropped 1.9% to $1.05 million, while revenue from its Oliver Wyman Group consulting unit drooped 1.8% to $441 million.

For the first six months of the year, Marsh & McLennan's consolidated revenue dropped 1.8% to $6.44 billion. Net income, however, rose 3.1% to $901 million.

Six-month revenue for Marsh fell 1.4% to $2.90 billion, although revenue from Marsh's U.S. and Canadian operations grew 6.9% to $1.40 billion,. Guy Carpenter first-half revenue dropped 4.9% to $643 million. Mercer's first-half revenue fell 2.3% to $2.08 billion, while revenue from Oliver Wyman rose less than 1% to $825 million.

In a note issued Tuesday, Meyer Shields, managing director at Keefe, Bruyette & Woods Inc. in Baltimore, said that Marsh & McLennan had posted better-than-expected margins in its risk and insurance services operations and a lower-than-expected tax rate, which was “partly offset by lower-than-expected organic growth across (risk and insurance services) and consulting and lower-than-expected consulting margins.”

“I am pleased with our results for the first half of the year” given “macroeconomic headwinds,” said Marsh & McLennan President and CEO Dan Glaser during a Tuesday morning earnings call.

Mr. Glaser noted the recent spike in merger and acquisition activity in the property/casualty marketplace without naming the companies involved. He said that the affect of that activity — which includes Ace Ltd.'s proposed acquisition of Chubb Corp. and Willis Group Holdings P.L.C.'s merger with Towers Watson Co. — on Marsh & McLennan “will be modest.”

“This was a fairly in line quarter for the company” as foreign exchange and pension expenses weighed on margins, said Mark Dwelle, an insurance analyst at RBC Capital Markets, a unit of RBC Dominion Securities Inc., in Richmond, Virginia, in a research note.

“ Although organic growth trends were comparatively weaker in a few areas, we expect growth in its core Marsh & Mercer units to remain solid this year.”

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