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Willis Group Third-Quarter Net Down 57% on Lower Revenue, Fewer Gains

Source: Dow Jones

Posted on 24 Oct 2012 by Neilson

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Willis third-quarter resultsWillis Group Holdings PLC's third-quarter profit fell 57% on lower fees and commissions, higher costs and fewer one-time benefits.

Willis, one of the world's largest insurance brokers, had seen its bottom line improve recently as it posted fewer charges related to a 2011 operational review and other special impacts. But its revenue from commissions and fees has been unsteady.

In the latest quarter, commissions and fees edged down 0.5%, roughly flat in North America and in the global segment, which includes the reinsurance and global specialties unit. Commissions and fees were down 2% in the company's international segment.

The year-ago period also benefited from several one-off gains, including revenue from tax adjustments and investment gains, said Chief Executive Joe Plumeri.

Willis reported a profit of $26 million, or 15 cents a share, down from $60 million, or 34 cents a share, a year earlier. The latest period included a $12 million charge related to a settlement with a former joint venture partner in India and the disposal of operations there, while the year-ago period included a $15 million charge related to an operational review.

Excluding special items, earnings from continuing operations declined to 22 cents from 41 cents.

Revenue slipped 0.8% to $754 million.

Analysts polled by Thomson Reuters predicted per-share earnings of 30 cents on revenue of $771 million.

Operating margin narrowed to 9.3% from 11.8%, and expenses grew 2.1%.