Upcoming AWS Coverage on Arthur J. Gallagher Post-Earnings Results

LONDON, UK / ACCESSWIRE / May 19, 2017 / Active Wall St. announces its post-earnings coverage on Willis Towers Watson PLC (NASDAQ: WLTW). The Company posted its first quarter fiscal 2017 financial results on May 04, 2017. The advisory, broking, and solutions Company outperformed top- and bottom-line expectations. Register with us now for your free membership at:

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One of Willis Towers Watson's competitors within the Insurance Brokers space, Arthur J. Gallagher & Co. (NYSE: AJG), reported on April 27, 2017, its financial results for the quarter ended March 31, 2017. AWS will be initiating a research report on Arthur J. Gallagher in the coming days.

Today, AWS is promoting its earnings coverage on WLTW; touching on AJG. Get our free coverage by signing up to:

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Earnings Reviewed

For the three months ended March 31, 2017, Willis Towers Watson's total revenues were $2.32 billion, an increase of 4% compared to $2.2 billion for the same period in the prior year. The Company's adjusted revenues, which include $32 million of revenue not recognized due to purchase accounting rules for Q1 2016, increased 2% or 5% in constant currency. Willis Towers Watson's revenue numbers surpassed analysts' consensus of $2.28 per share.

Willis Towers Watson' adjusted EBITDA for the reported quarter was $708 million, or 30.5% of total revenues, an increase from adjusted EBITDA of $671 million, or 29.6% of adjusted revenues, for the year ago same quarter. The first quarter is a seasonally strong quarter due to the renewal periods for some lines of business.

Net income attributable to Willis Towers Watson for Q1 2017 was $344 million compared to $238 million for Q1 2016. For the reported quarter, diluted earnings per share were $2.50, and adjusted diluted earnings per share were $3.71. Net income attributable to Willis Towers Watson and diluted earnings per share for Q1 2017 include pre-tax $40 million of integration expenses and $27 million of restructuring costs. The Company's adjusted earnings surpassed Wall Street's estimates of $3.33 per share.

Segment Highlights

During Q1 2017, Willis Towers Watson's Human Capital & Benefits ("HCB") segment reported commissions and fees of $951 million, an increase of 3% or 5% increase constant currency, compared to $926 million in Q1 2016. The Company's Retirement revenues increased in the reported quarter led by Great Britain and Western Europe. Revenues increased in the Americas due to an increase in utilization. Talent and Rewards experienced a large drop in revenues, primarily in the Rewards, Talent and Communication consulting business in North America. Revenue in the Technology and Administration business in Great Britain experienced growth as a result of new administration clients and project activity. The HCB segment had total revenues of $955 million, which includes interest and other income, and an operating margin of 37%.

For Q1 2017, Willis Towers Watson's Corporate Risk & Broking ("CRB") segment had commissions and fees of $650 million, an increase of 1% or 3% constant currency increase compared to $641 million in Q1 2016. The segment's growth was driven by its International unit, primarily due to regulatory changes, which brought forward business into Q1 2017. Additionally, China and Hong Kong delivered significant new business. Western Europe also had strong organic growth, primarily in Southern Europe and France, as a result of new business wins. The CRB segment had total revenues of $655 million, which includes interest and other income, and an operating margin of 19%.

Willis Towers Watson's Investment, Risk & Reinsurance ("IRR") segment generated commissions and fees of $502 million in Q1 2017, an increase of 1% or 5% on constant currency from $498 million in Q1 2016. Wholesale, Investment, Risk Consulting and Software, Max Mathiessen and Reinsurance all posted notable revenue growth, primarily as a result of strong sales and increased performance fees and timing. Portfolio Underwriting Services and WTW Securities performances slightly offset the revenue growth for the segment. The IRR segment had total revenues of $507 million, which includes interest and other income, and an operating margin of 44%.

During Q1 2017, the Company's Exchange Solutions segment had commissions and fees of $179 million, an increase of 10% compared to 163 million in Q1 2016. Retiree and Access Exchanges revenues increased by 6% and Active Exchanges revenue growth was 24%, primarily as a result of the 2017 annual enrollment season. Technology and Administration Solutions had strong revenue growth as well, as a result of obtaining new clients and experiencing a higher level of project activity. The Exchange Solutions segment had total revenues of $179 million and an operating margin of 21%.

Outlook for 2017

For 2017, the Company continues to expect constant currency revenue growth between 2% and 3% and adjusted diluted earnings per share in the range of $8.40 to $8.55.

Stock Performance

On Thursday, May 18, 2017, the stock closed the trading session at $139.85, slightly down 0.55% from its previous closing price of $140.63. A total volume of 1.49 million shares have exchanged hands, which was higher than the 3-month average volume of 838.00 thousand shares. Willis Towers Watson's stock price rallied 9.04% in the last month, 11.09% in the past three months, and 14.29% in the previous six months. Furthermore, since the start of the year, shares of the Company have surged 14.83%. The stock is trading at a PE ratio of 36.62 and has a dividend yield of 1.52%.

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SOURCE: Active Wall Street