Towers Watson suffers as spend on Obamacare platform rolls on
TOWERS Watson plunged in trading yesterday after reporting weak second quarter results.
The US company, which has a strong UK presence, closed over eight per cent lower after year-on-year revenues fell 2.5 per cent for the three months ending December down to $888m (£543.4m).
It blamed a particularly strong second quarter last year, which saw revenues boosted by the sale of its brokerage business.
“As expected, this was a challenging quarter due to the tough comparables from last year,” chief executive John Haley said.
“Although our revenues were a little softer than expected, we continued to make significant progress this quarter against our strategic positioning efforts.”
The firm’s exchange solutions division, which is being used by the Obama administration to help enrol people into health insurance plans, reported a 125 per cent increase in revenues to $36m from $16m .
It added that OneExchange Retiree, the platform offering the insurance, increased by “low triple digits”.
Haley said the firms business investment was “very focused” on the OneExchange business, dampening the overall results.