Benzinga | Jan 27, 2021 10:32AM EST

Marsh & McLennan's Earnings: A Preview

On Thursday, January 28, Marsh & McLennan (NYSE:MMC) will release its latest earnings report. Decipher the announcement with Benzinga's help.

What Are Earnings, Net Income, And Earnings Per Share?

Earnings and EPS are useful metrics of profitability. Total earnings also known as net income is equal to total revenue minus total expenses. Dividing net income by the total number of shares outstanding yields EPS.

Earnings And Revenue

Marsh & McLennan EPS will likely be near $1.12 while revenue will be around $4.26 billion, according to analysts. Marsh & McLennan EPS in the same period a year ago totaled $1.19. Revenue was $4.26 billion.

What Are Analyst Estimates And Earnings Surprises, And Why Do They Matter?

Wall Street analysts who study this company will publish analyst estimates of revenue and EPS. The averages of all analyst EPS and revenue estimates are called the "consensus estimates"; these consensus estimates can have a significant effect on a company's performance during an earnings release. When a company posts earnings or revenue above or below a consensus estimate, it has posted an "earnings surprise", which can really move a stock depending on the difference between actual and estimated values.

The analyst consensus estimate would represent a 5.88% decline in the company's EPS figure. Sales would have fallen 0.09% from the same quarter last year. Here is how the company's reported EPS has stacked up against analyst estimates in the past:

Quarter Q3 2020 Q2 2020 Q1 2020 Q4 2020EPS Estimate 0.72 1.13 1.57 1.18EPS Actual 0.82 1.32 1.64 1.19Revenue Estimate 3.84 B 4.19 B 4.68 B 4.33 BRevenue Actual 3.97 B 4.19 B 4.65 B 4.26 B

Stock Performance

Shares of Marsh & McLennan were trading at $111.26 as of January 26. Over the last 52-week period, shares are down 4.71%. Given that these returns are generally negative, long-term shareholders are probably upset going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. Marsh & McLennan is scheduled to hold the call at 08:30:00 ET and can be accessed here.