Marsh & McLennan Cos. said Wednesday it returned to profitability in the third quarter amid improving earnings in its risk and insurance services division and a decline in expenses. Just as it did in the second quarter, the New York-based insurance broker and consulting firm was able to slash costs faster than its revenue declined during the quarter, helping it to post a better-than-expected profit. Ongoing weakness in the global economy continued to hurt Marsh & McLennan's consulting and risk consulting and technology divisions. Marsh & McLennan earned $221 million, or 41 cents per share, during the quarter ended Sept. 30. It lost $8 million, or 2 cents per share, during the same period last year. Adjusted earnings, which exclude special charges like those tied to restructuring, totaled $273 million, or 48 cents per share, during the quarter. Analysts polled by Thomson Reuters, on average, forecast earnings of 26 cents per share on revenue of $2.6 billion. Analysts do not always include special charges in their estimates. Marsh & McLennan's revenue totaled $2.52 billion during the quarter, an 11 percent decline from the third quarter in 2008. Significant cost-cutting in the risk and insurance services divisions, which includes its Marsh and Guy Carpenter units, helped make that unit of Marsh & McLennan profitable during the quarter. The division reported operating income of $127 million in the quarter, compared with a loss of $28 million during the year-ago period. Revenue in the division fell 4 percent amid declining premium rates in the property and casualty marketplace. Marsh & McLennan's revenue tumbled 14 percent in its consulting division, which includes subsidiaries Mercer and Oliver Wyman Group. Mercer had double-digit revenue declines across all of its consulting services. Brian Duperreault, Marsh & McLennan's president and CEO, said during a conference call with analysts, "Both Mercer and Oliver Wyman continue to face difficult conditions in the third quarter." Duperreault said the continued weakness in the global economy was still weighing on the consulting business. However, Duperreault was optimistic that the economic environment and business is improving. Continued... |