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Tickers in this Article: MMC
Marsh & Mclennan Companies (NYSE:MMC) announced its results for the most recent quarter on August 7, 2012. Marsh & McLennan is a global professional services firm providing advice and solutions in the areas of risk, strategy, and human capital.

Investors care about earnings because they drive stock prices. Strong earnings generally result in the stock price moving up and vice versa. SEE: 5 Tricks Companies Use During Earnings Season

The Numbers: Marsh & Mclennan Companies' EPS beat estimates and the company's revenues fell in line with predictions. The company reported adjusted net income of 61 cents per share versus the 58 cents per share estimate and revenues of $3.03 billion versus the $3.04 billion estimate. Revenue climbed 3.3% from the same period last year. Marsh & Mclennan Companies' revenue has grown during each of the past four quarters on a year-over-year basis. Net income for the second quarter was $329 million. According to the reported number, this is up 16.7% from last year's figures. Last quarter marked the third in a row of rising net income.

Management Quote: Brian Duperreault, President and CEO, said: "Our outstanding second quarter results successfully built on our strong first quarter. We produced revenue growth in each of our Operating Companies as well as excellent growth in operating income in both Risk and Insurance Services and Consulting, with meaningful margin improvement.

A Look Back: Net income has increased 9.3% year-over-year on average across the last five quarters. The biggest gain came in the fourth quarter of the last fiscal year, when income climbed 26.1% from the year-earlier quarter.

Looking Ahead: When earnings estimates stay consistent leading up to earnings season, this usually shows analysts accurately predicted earnings estimates and business is stable. Be cautious though as this may also be a warnings sign that earnings could come at a huge surprise to the upside or downside as analyst did not correctly predict earnings. Steady earnings estimates mean there is not enough change going on with the company to make analysts change their opinions. When earning estimates are steady, investors can look at the revenue trend for a more fundamental indicator. For the fiscal year, the average estimate has moved up from $2.14 a share to $2.15 over the last ninety days.

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