Willis Group shares rise after profit surprises Wall Street

NEW YORK—Willis Group Holdings Ltd. shares rose sharply Thursday after the insurance broker's first-quarter results exceeded analyst estimates on lower costs.

The New York firm's shares rose $2.16, or 6.2 percent, to close at $36.91. In the past year, the stock has ranged from $30.40 to $46.64.

Willis said late Wednesday that net income slipped to $166 million, or $1.16 per share, from $169 million, or $1.10 per share, in the year-ago period. The per-share figure rose because the company had fewer shares outstanding in the latest quarter. The result was hurt by a charge of $33 million for severance and other costs.

Excluding items, adjusted earnings rose 20 percent to $1.32 per share. Analysts expected profit of $1.17 per share, according to Thomson Financial.

Revenue rose to $795 million from $739 million last year, beating Wall Street's estimate for $769 million. Many insurers have reported declining premium income as competition in the property and casual markets depresses prices.

Stifel Nicolaus analyst Meyer Shields said the results are "evidence that Willis' sales culture can still generate enough revenues to outrun the enduring soft property and casualty market."

He rates the stock a "Buy."

Willis also named Jeffrey Lane, chairman and chief executive of Bear Stearns Asset Management, to its board.

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