Marsh & McLennan Cos., an insurance broker and consulting firm, said Wednesday its fourth-quarter profit fell 53 percent because of costs tied to settling lawsuits filed in 2004.
Marsh & McLennan recorded $435 million in charges tied to settling cases that alleged the company steered business to certain insurance carriers in exchange for kickbacks. The company did not admit any wrongdoing when settling the cases.
Excluding the costs, adjusted profit rose 56 percent.
Net income fell to $38 million, or 7 cents per share, in the final three months of 2009, from $80 million, or 15 cents per share, a year earlier.
But adjusted earnings, which exclude special items like those tied to lawsuit settlements, was $189 million, or 38 cents per share, during the quarter, up from an adjusted profit of $121 million, or 36 cents per share, a year ago.
Analysts polled by Thomson Reuters, on average, forecast fourth-quarter profit of 37 cents per share on revenue of $2.56 billion. Analysts typically exclude special, one-time charges in their estimates.
Marsh & McLennan’s revenue grew 3 percent to $2.73 billion during the quarter and topped analysts’ expectations. Revenue rose in both of its primary businesses: risk and insurance services and consulting.
Revenue in the risk and insurance services business, which includes its Marsh and Guy Carpenter units, rose 5 percent to $1.34 billion.
Marsh, the company’s largest operating unit, saw strong growth internationally, while business slipped in North America.
Marsh’s international revenue jumped 9 percent, while business in the U.S. and Canada fell 1 percent. The international operations are now larger and North American business, accounting for 51 percent of revenue.
Marsh & McLennan’s consulting services businesses, Mercer and Oliver Wyman Group, saw revenue rise 3 percent to $1.24 billion. Retirement and health and benefits consulting helped drive Mercer’s revenue higher.
Risk consulting and technology revenue fell 6 percent to $170 million.
For the full year, Marsh & McLennan earned $242 million, or 45 cents per share. It lost $73 million, or 14 cents per share, in 2008.
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