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Tickers in this Article: MMC
When Marsh & McLennan (NYSE:MMC) releases its second quarter earnings on Tuesday, August 7, 2012, it is expected to report earnings that are up 16% from a year ago. The consensus estimate is 58 cents per share, up from earnings of 50 cents per share a year ago.

Investors care about earnings because they drive stock prices. Strong earnings generally result in the stock price moving up and vice versa. SEE: How To Decode A Company's Earnings Reports

What to Expect: The consensus estimate is down from three months ago when it was 59 cents. For the fiscal year, analysts are expecting earnings of $2.15 per share.

Revenue is expected to exceed last year's figure of $2.93 billion by 5.2% and come in at $3.08 billion for the quarter. Revenue for the fiscal year is expected to come in at $12.17 billion.

Company Performance: Marsh has reported revenue increases for the past four quarters. It increased 5.8% to $3.05 billion in the first quarter. Prior to that, the figure rose 4.4% in the fourth quarter of the last fiscal year, 11.2% in the third quarter of the last fiscal year and 12.4% in the second quarter of the last fiscal year.

The company has been profitable for the last eight quarters; profit has risen year-over-year by an average of 7.4% over the most recent four quarters.

MMC is in line with the industry average with a P/E ratio of 18.3. Perhaps one of the most widely-used stock analysis tools is the price-to-earnings ratio, or P/E. A high P/E ratio indicates a stock that is expensive, while a low P/E ratio indicates a stock that is cheap. SEE: How To Use The P/E Ratio And PEG To Tell The Future Of A Stock

Since May 4, 2012, the stock price has fallen 3.1% to $33.04 from $34.09. Marsh's best recent streak was when its price gained $2.07 per share between July 24, 2012 and July 30, 2012.

The Competition: Marsh & McLennan is a global professional services firm providing advice and solutions in the areas of risk, strategy, and human capital. Most analysts (13 of 17) rate Marsh a buy. Opinion about the stock has worsened recently, as buy ratings have dropped slightly over the last three months.

The company's closest competitor in the insurance (miscellaneous) industry is Aon (AON). Analysts are more optimistic about Marsh than about Aon. Only nine out of 17 analysts rate the latter a buy.

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