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What: Shares of insurance broker Willis Group
So what: As is often the case in earnings reports, Willis led with the positive news: The company is planning to buy back $100 million in its own shares and boosted its dividend by 3.8%. More on that in a moment.
The news wasn't quite as good from there. The London-based broker faced particular challenges in North America thanks to its Loan Protector business, which offers lender-placed insurance. Adjusted earnings per share clocked in at $0.46, down 19% from a year ago. Revenue, meanwhile, slid 1% to $825 million as organic commissions also fell 1%. Wall Street analysts were looking for adjusted earnings per share of $0.48 on $845 million in revenue.
Now what: Rewinding to the beginning of Willis' earnings report, a company that's buying back a bunch of stock and raising its dividend is not one that's tepid about its future. To be sure, Willis CEO Joe Plumeri said, "I have no doubt that, in 2012, our businesses that performed well last year will remain strong, and those businesses that must strengthen will do so."
That certainly sounds good, but after a clearly lackluster 2011 that ended on a worse-than-expected note, Plumeri and Willis have some proving to do. The upshot? Investors are currently valuing Willis's stock at just over 11 times 2012 expected earnings per share, certainly leaving room for upside.
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Fool contributor Matt Koppenheffer does not have a financial interest in any of the companies mentioned. You can check out what Matt is keeping an eye on by visiting his CAPS portfolio, or you can follow Matt on Twitter @KoppTheFool or Facebook.
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