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Marsh & McLennan Profit Slides

Excluding items, however, its earnings top forecasts.

Beleaguered financial services giant

Marsh & McLennan

(MMC) - Get Report

said its first-quarter earnings fell from a year ago on costs related to restructuring, employee retention, regulatory and compliance matters, and potential Putnam fund reimbursements.

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Consolidated revenue totaled $3.2 billion, and net income was $134 million, or 25 cents a share, after pretax costs of about $225 million. Excluding the items, earnings would have been 52 cents a share. Analysts polled by Thomson First Call were expecting the company to report earnings of 49 cents a share.

In the first quarter of 2004, net income was $446 million, or 83 cents a share.

A year ago, the quarterly results included settlement expenses, insurance recoveries relating to World Trade Center losses, severance, and regulatory and compliance costs.

Last fall, New York Attorney General Eliot Spitzer announced an insurance-industry crackdown, including accusations that Marsh & McLennan rigged bids and fixed prices on commissions. The investigation led to the resignation of the company's CEO, and in a January settlement Marsh agreed to pay $850 million.