Can Marsh & McLennan (MMC) Q1 Earnings Beat On Revenues?

Marsh & McLennan Companies, Inc. (NYSE:MMC) will release first-quarter 2018 results on Apr 26, before the market opens. Last quarter, the company delivered a positive earnings surprise of 10.5%.

Let’s see, how things are shaping up prior to this announcement.

The company’s first-quarter results are expected to benefit from increased revenues at both its operating segments of Risk and Insurance Services as well as Consulting. The Zacks Consensus Estimate for net operating revenues is pegged at $3.8 billion, reflecting 8.5% year-over-year growth.

The company’s Risk and Insurance Services segment has been growing over the past several quarters on the back of accretive acquisitions and the trend is expected to continue in the to-be-reported quarter. The Zacks Consensus Estimate for this segmental revenues is pegged at $2.2 billion, up 10% year over year.

Also, the company’s Consulting segment has been significantly contributing to the revenue base, riding on both organic and inorganic growth efforts. The consensus mark for revenues from this segment is $1.6 billion, representing 6.7% increase year over year.

The company is expanding its footprint in the regions of Latin America, Asia, the Middle East and South Africa, which remain underexplored with high-growth potential. Performance from these regions is likely to boost overall results. Additionally, the company is widening its horizon into new businesses, which are expected to drive the top line.

Earnings Whispers

Our proven model does not conclusively show that Marsh & McLennan is likely to beat on earnings this quarter. This is because a stock needs to have both a positive Earnings ESPand a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here as you will see below.

Zacks ESP: Marsh & McLennan has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Marsh & McLennan Companies, Inc. Price and EPS Surprise

Zacks Rank: Marsh & McLennan carries a Zacks Rank #3, which increases the predictive power of ESP. However, a company needs to have a positive ESP to be confident about an earnings surprise. Hence, this combination leaves surprise prediction inconclusive.

We caution against the Sell-rated stocks (#4 or 5) going into an earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are some companies from the Finance sector that you may want toconsider as these have the right combination of elements to beat estimates this quarter:

Aflac Incorporated (NYSE:AFL) has an Earnings ESP of +1.73% and a Zacks Rank #2. The company is set to report first-quarter earnings on Apr 25. You can see the complete list of today’s Zacks #1 Rank stocks here.

Nasdaq, Inc. (NASDAQ:NDAQ) has an Earnings ESP of +0.31% and a Zacks Rank of 3. The company is set to report first-quarter earnings on Apr 25.

ConnectOne Bancorp, Inc. (NASDAQ:CNOB) has an Earnings ESP of +2.86% and is a #3 Ranked player. The company is set to report first-quarter earnings on Apr 25.

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