Corporate consultancy Willis Towers Watson (WTW 0.28%) was having an eventful week, not least because a fresh earnings report led to investors selling out of the stock. According to data compiled by S&P Global Market Intelligence, the company's shares were down by 9% week-to-date as of early Friday afternoon.
Not a towering quarter
Willis Towers dropped its first-quarter figures early Thursday morning. Headline revenue came in at $2.41 billion, for a 8% increase year-over-year. However, "organic" revenue -- which, in the company's case, means its total take excluding foreign currency fluctuations, the impact of recent acquisitions and divestments, and certain one-off items -- only crept 3% higher.
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There was stronger bottom-line growth, as Willis Towers' net income not under generally accepted accounting principles (GAAP) rose 13% to $357 million, or $3.72 per share.
The revenue figure was essentially in line with analyst expectations. The company beat on non-GAAP (adjusted) net income, as those pundits slightly low-balled this with a collective $3.66 per share forecast.
Neither of Willis Towers' two main reporting segments, health, wealth, and career (HWC), nor risk and broking, posted impressive revenue gains on the company's organic basis. That for HWC improved by 3% (to almost $1.27 billion), while risk and broking's take inched 2% higher to slightly under $1.12 billion.
NASDAQ: WTW
Key Data Points
Fuzzy guidance
Another factor dampening enthusiasm for Willis Tower stock, at least in my observation, was the lack of any concrete guidance. Management provided certain pieces of information about financial impacts on its business for full-year 2026 -- such as a planned $1 billion share repurchase program, and "continued annual margin expansion" -- but didn't provide any revenue or profitability forecasts.
Meanwhile, in its conference call discussing the quarter, company management pointed to several headwinds, including inflation in the healthcare space and an increase in geopolitical risk. Given those fairly tepid top-line growth figures and the potentially harmful impact of the mentioned factors, I think it might be wise to avoid this stock for now.
