Difficult fourth quarter for Willis

by David Masters

Story link: Difficult fourth quarter for Willis

Willis reported its fourth quarter results this week, revealing a decline in net income from $148 million to $95 million. The company’s total reported revenues for the quarter saw a 3% increase, reaching $639 million. Their operating margin for the quarter was 23.6%, up 2.3% on year.

The company’s global segment was hit by a 7% fall in commission and fees during the quarter. Willis blamed this in declining premiums and higher retention rates by primary carriers through 2007.

In North America the broker saw a revenue fall of 7%. The company said in response to thise: “Over the past year, the focus in North America has been to improve profitability and build an integrated operating platform. Both of these efforts have been successful with operating margin improvement and an increase in revenue per employee in this segment for the full year 2007.”

The company’s international business fared better, delivering 9% organic growth in commission and fees. This was driven by solid growth in Italy, Spain, and Denmark.

Joe Plumeri, Willis’s CEO and Chairman, said of the results: This year demonstrated that our Shaping our Future strategy is working, with top line growth, adjusted operating margin expansion and improvement in adjusted earnings.

“Our extensive network encompasses some of the world’s fastest growing regions, and the diversity of our business mix and targeted growth strategies position us well for continued success. The increased dividend approved today, and $1 billion buyback authorization approved in November 2007, reflect the continued confidence we have in the outlook for the Company.”

Willis’s total revenue for 2007 was $2.6 billion, a 6% increase compared to 2006. Adjustment earnings per diluted share (excluding 2006 tax credit) also increased to $2.78, a rise of 23%.