Marsh & McLennan Misses, Plans $500m Buyback, Shares Down in Pre-Market

Marsh & McLennan reported a 36% decline in Q1 net income to $268 million, or $0.47 per share, due to a one-off gain last year. EPS from continuing operations totaled $0.41 (vs. $0.36 last year), but fell short of the Street's $0.50 estimate. Revenue rose 5.2% to $2.81b, but also missed analysts' forecast ($2.88b). The company's insurance unit, Marsh Inc., recorded a slight decline in revenue to $1.14b (vs. $1.15b), but is expected to see an increase of 3% - 5% for the year. It has struggled since a 2004 lawsuit by Eliot Spitzer, when it paid $850 in a settlement without admitting or denying wrongdoing. Marsh & McLennan announced a $500m share buyback, which it says it "expects to execute promptly." It will close its $3.9b sale of Putnam Investments to Canada's Great-West Lifeco later this year. Shares of Marsh lost 0.6% to $31.93 in normal trading Monday and last traded 5.3% lower to $30.25 in pre-market trading on volume over 56,000.

Sources: Press release, Bloomberg, The Wall Street Journal
Commentary: Value Stocks in the Insurance Sector • Capture The CalPERS Effect For Stock Ideas • The Short Case on Marsh & McLennan Companies
Stocks/ETFs to watch: Marsh & McLennan Companies (MMC). Competitors: American International Group (AIG), Aon (AOC), ING Group (ING).ETFs: streetTRACKS KBW Insurance (KIE)

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