Marsh & McLennan Companies, Inc. (MMC)

NetscribeBanking (96.54) Submitted: 4/26/07 2:10 AM : Start Price: $30.88 MMC Score: -5.57

Marsh and McLennan Companies revenues for the year 2006 had a modest growth of 3% at $11.9 billion, but its income from continuing operations more than doubled to $818 million. The restructuring plan seems to be going right on track and is expected to have annualized savings of $350M, while incurring approximately $225M of restructuring related costs and might help in improving the operating efficiency. The huge debt of around $2.9 billion it carries in the balance is really a cause of concern, as it does not enjoy good credit ratings. However the deal to sell of Putnam Investments to Great West Lifeco seems sensible as it would help it concentrate more on it is core operations, improve financial flexibility and use the proceeds to repay debt, share buybacks and other ventures.





In the recent past the company has been subject to class action lawsuits and has other regulatory issues still pending which might affect its earnings. Insurance brokerage business is highly regulated apart from facing severe competitive pricing pressures and chances of property and casualty market having a smooth landing in 2007 looks uncertain.





Marsh and McLennan Companies is a worlds leading global professional services firm that provides risk and insurance services that operate through various independent units and subsidiaries. The strategy of the parent company has been to provide autonomy to units who in turn have opted for international growth in the European and Asian region as means of expansion. Though the company has good growth prospects for a positive results the chances of crossing double-digit mark looks dim.

Report this Post Replies: 0 | Reply