DOW JONES NEWSWIRES 
 

Marsh & McLennan Cos. (MMC) posted a 5.9% drop in fourth-quarter net income on higher restructuring costs as soaring earnings at its core insurance-brokerage business were offset by a slump at its consulting arm, which is more susceptible to the economy's ups and downs.

For insurance brokers, the economic recession comes on top of a bruising policy price war tied to below-average catastrophe rates. Last week, rival Aon Corp. (AOC) posted a 95% net-income drop, hurt by an expected loss tied to a unit sale and higher restructuring costs.

Fitch Ratings last month had projected flat to modestly weaker profits for insurance brokerages this year amid economic pressures.

Marsh & McLennan, one of the world's largest insurance brokerages, reported net income of $80 million, or 15 cents a share, compared with $85 million, or 16 cents a share, a year earlier. Excluding restructuring charges and other items, earnings rose to 37 cents a share from 24 cents.

Revenue fell 8.7% to $2.66 billion.

Analysts surveyed by Thomson Reuters were expecting earnings, excluding items, of 32 cents a share on revenue of $2.98 billion.

Earnings at Marsh & McLennan's risk and insurance division - including its core brokerage unit Marsh Inc. and the Guy Carpenter business - more than doubled on improved results at both operations. Revenue fell 6% on lower reinsurance rates, but operating margin soared to 8.2% from 3.7%.

Profit at the company's Mercer and Oliver Wyman consulting units fell 25% amid a 9% revenue drop as economic and financial-market turmoil took its toll. Operating margin tumbled to 6.8% from 12.3%.

March & McLennan shares finished Tuesday at $18.71 and were inactive pre-market. The stock is down by nearly half the past five months, including 23% already this year.

-By Mike Barris, Dow Jones Newswires; 201-938-5658; mike.barris@dowjones.com