The insurance broker and consultant beat revenue and earnings estimates, led by 14% growth in management consulting. Adjusted operating income rose more slowly than earnings per share.
Marsh gave investors a clean beat on Thursday, the kind that has been in short supply among financial companies this week.
The insurance broker and consulting firm reported third-quarter revenue of $6.86 billion, up 8% from a year earlier and 5% on an underlying basis, which strips out acquisitions, divestitures and currency. Analysts had expected $6.64 billion. Adjusted earnings rose 10% to $2.03 a share, ahead of the $1.97 forecast. Reported earnings were $1.69 a share.
"Marsh delivered a strong third quarter, generating 5% underlying revenue growth and double-digit EPS growth," Chief Executive John Doyle said.
The shares rose about 5.4% to near $188 by early afternoon.
Where the growth came from
The consulting side led. The management consulting business grew 14%, faster than the insurance brokerage operations. Adjusted operating income rose 6% to $1.53 billion.
That gap between operating income growth of 6% and earnings-per-share growth of 10% is worth noting. Part of the difference comes from below the operating line: Marsh repurchased 2.7 million shares for $500 million in the quarter, which lifts per-share figures. Earnings per share growing faster than operating profit is common for mature companies that return capital, but it means the per-share figure overstates the growth of the underlying business.
Management also raised the savings target for its Thrive efficiency program, according to accounts of the earnings call.
Against the backdrop
Insurance brokers earn commissions largely as a share of premiums, so their revenue moves with insurance pricing as well as with new business. Marsh's beat came largely from the consulting side and from earnings leverage.
The stock's rise came on a day when financial stocks broadly gained about 1.3%, though Marsh outperformed the sector.
Market implications
One reading is that Marsh is executing well in a steady market. Revenue and earnings beat, consulting is growing in double digits, and a larger savings target supports margins.
A second reading is that the quality of the beat is more modest than the headline. Underlying growth was 5%, operating income grew 6%, and the 10% earnings increase relied partly on factors below the operating line.
What to watch
Peers Aon, Arthur J. Gallagher and Willis Towers Watson report over the coming weeks, which will show whether 5% underlying growth is above or below the industry's pace. The progress of the Thrive savings program and any commentary on insurance pricing heading into 2027 renewals are the next markers.