Willis Towers Watson Public Limited Company (NASDAQ:WLTW) Q1 2019 Earnings Conference Call - Final Transcript
May 01, 2019 • 09:00 am ET
(Operator Instructions) And our first question coming from the line of Greg Peters from Raymond James. Your line is open.
Good morning. I'll ask a couple of questions. First on organic growth. The first quarter result running ahead of your full-year guidance, if I reflect back on the last couple of years, it seems like the second quarter has always been a struggle. But nevertheless with you running ahead of your guidance is suggesting that maybe some of the quarters, maybe lower going forward than where you were in the first quarter. Can you comment?
John J. Haley
Yeah, I mean I think Greg, you know we don't reflect our guidance for what we think are relatively smaller changes, we don't. So, Mike just got for a sake, even though we have the negative currency effect is bigger than we anticipated, we're not changing our guidance, we have a range there. And similarly, with the revenue even though we're a little bit ahead in the first quarter, we're not changing our guidance right now. So, we don't adjust for every small little thing.
I got it. I thought we were done with ASC 606, but it popped up in Mike's comments. And if I'm not mistaken the benefit to 2019 was going to be in total around $40 million and you've only booked a $11 million of that. So, that leaves $29 million to fall through in the second and third quarter, is that correct?
John J. Haley
Yeah, I'll let Mike comment on that, but let me just say I had that we were talking about this the other day about 606. I thought we were done with it, too, and I was telling folks that have reminded me from the scene in Carrie, where the hand comes up out of the grave to strangle you. We just can't seem to get rid of this, the effects of this standard. So, up, Mike?
Yeah. So, Greg, the number actually is $59 million in total and the remainder above that above the $11 million that I commented on in my prepared remarks will happen by the end of the third quarter.
I love the analogy. And so, should I -- should we look at the $59 million as recurring in nature, going forward. So, when I think about 2020 et cetera, or is this one-time, where it gets pulled out of 2020 in comparison to 2019?
It will be recurring going forward is how we think about it.
All right. I guess the final question would be around the adjusted operating margin, 20% is your target for the year. And then I look at the segment results and I've always felt like CRB had the most opportunity and yet it looked like it was a drag on the consolidated adjusted operating margin at least in terms of improvement in the first quarter. Can you give us some updated perspective on how that might progress through the year?
Yeah, Greg, so we look at it, I mean that