NEW YORK (Reuters) - Marsh & McLennan Cos Inc., the second-largest global insurance broker, posted a first-quarter profit yesterday, reversing a year-earlier loss, as lower costs helped offset a decline in revenue.

The company's largest division, risk and insurance services, posted an eight percent drop in revenue to $1.4 billion. Consulting segment revenue fell even more steeply, by 16 percent to $1.1 billion.

Helping to cushion the bottom line was a reduction in expenses of more than 25 percent, to $2.23 billion from $3.13 billion a year earlier.

Chief executive Brian Duperreault, on a conference call with investors, said cost-cutting initiatives were going better than expected.

Marsh & McLennan shares rose three percent to $21.22 in early trading on the New York Stock Exchange.

Net profit in the first quarter was $176 million, or 33 cents a share, compared with a net loss of $210 million, or 40 cents per share, a year earlier, when the company took a large goodwill charge.

On an adjusted basis, the company earned 40 cents a share, three cents below analysts' average forecast, according to Reuters estimates. Consolidated revenue fell 13 percent to $2.6 billion, missing expectations of $2.95 billion.

Chief financial officer Vanessa Wittman told investors that accounting changes adopted in the quarter, related to how earnings per share are calculated and the accelerated amortization of deferred compensation, shaved three cents from adjusted earnings per share.

Without these changes, adjusted earnings would have met analysts' expectations, she said.

Marsh & McLennan had an investment loss in the period stemming from $15 million in market valuation declines of private equity fund investments.

Both Marsh & McLennan and its larger rival, Aon Corp., have been aggressively cutting costs as fee and commission income has been constrained by lower insurance pricing and changes in what they are permitted to charge clients.

Aon last week posted higher first-quarter profit despite lower revenue. But adjusted profit missed expectations, sending its shares lower.