Marsh & McLennan Posts 2Q Loss On Sale; Revenue Misses Views

   DOW JONES NEWSWIRES 
 

Marsh & McLennan Cos. (MMC) swung to a second-quarter loss on the effects of divestiture as the insurance broker continued to see weakness at its consulting businesses. Revenue missed expectations.

Chief Executive Brian Duperreault said results for the company's risk and insurance services business were excellent, adding the company as a whole performed well despite the effect of the continued economic downturn.

Economic volatility has been boosting business at the company's core insurance brokerages as customers look for help managing risk. But the recession has weighed on its other operations, such as its consulting and technology segments. Insurers are also in the midst of price wars because of below-average catastrophe rates.

Marsh & McLennan, one of the world's biggest insurance brokerages, posted a loss of $193 million, or 37 cents a share, compared with year-earlier income of $65 million, or 12 cents a share. Excluding the divestiture of its U.S. government security-clearance screening business and other items, earnings fell to 33 cents from 39 cents.

Revenue decreased 13% to $2.63 billion, or 6% on an underlying basis. That excludes acquisitions, divestitures and other impacts.

Analysts polled by Thomson Reuters expected earnings of 32 cents on revenue of $2.76 billion.

The company's risk and insurance division - which includes its core Marsh Inc. insurance brokerage business and the Guy Carpenter unit - posted a 31% profit increase on "substantially improved performance" at both units as underlying revenue was flat.

Earnings at its Mercer and Oliver Wyman consulting businesses, more exposed to economic woes, fell 39% on an increase in professional liability costs and the adverse economic conditions. Underlying revenue declined 9%.

Marsh & McLennan shares closed Tuesday at $21.50 and haven't traded premarket.

-By Kerry Grace Benn, Dow Jones Newswires; 212-416-2353; [e-mail]