Why Is Willis Towers Watson (WTW) Up 4.3% Since Last Earnings Report?

Core Insights - Willis Towers Watson (WTW) reported fourth-quarter 2024 adjusted earnings of $8.13 per share, surpassing the Zacks Consensus Estimate by 1.5% and reflecting a 9% year-over-year increase [2] - The company achieved adjusted consolidated revenues of $3 billion, a 4% increase year-over-year, although it fell short of the Zacks Consensus Estimate by 0.3% [3] - The total costs of providing services decreased by 0.04% year-over-year to $2.1 billion, contributing to a 10% increase in adjusted operating income to $1 billion [4] Financial Performance - Adjusted EBITDA rose to $1.1 billion, marking an 8.6% year-over-year increase, with an adjusted EBITDA margin of 38.6%, expanding by 150 basis points [5] - For the full year, adjusted earnings reached $16.93 per share, exceeding the Zacks Consensus Estimate by 1% and reflecting a 17% year-over-year increase [15] - Cash and cash equivalents as of December 31, 2024, were $1.8 billion, up 32.7% from the end of 2023, while long-term debt increased by 16.2% to $5.3 billion [11] Segment Performance - Health, Wealth & Career segment revenues totaled $1.8 billion, a 3% year-over-year increase, but missed the Zacks Consensus Estimate by 1.2% [6] - Risk & Broking segment revenues rose to $1.1 billion, a 6% year-over-year increase, although it also fell short of the Zacks Consensus Estimate by 0.1% [8] Future Outlook - The company anticipates share repurchases of $1.5 billion and projects an average annual margin expansion of 100 basis points over the next three years in the Risk & Broking segment [13] - WTW expects cash outflows in 2025 related to the settlement of accrued costs from the Transformation program, which concluded in 2024 [14] - Estimates for the stock have trended downward, with a consensus estimate shift of -8.56% over the past month, leading to a Zacks Rank of 5 (Strong Sell) [16][18]