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Arthur J. Gallagher (AJG) Q1 Earnings Beat Estimates, Rise Y/Y
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Arthur J. Gallagher & Co. (AJG - Free Report) reported first-quarter 2022 adjusted net earnings of $2.81, which beat the Zacks Consensus Estimate by 1.4%. The bottom line increased 39.1% on a year-over-year basis.
Arthur J. Gallagher’s performance was driven by higher revenues across the Brokerage and Risk Management segments, partially offset by higher expenses.
Arthur J. Gallagher & Co. Price, Consensus and EPS Surprise
Total revenues of $2.4 billion missed the Zacks Consensus Estimate by 2.8%. The top line however improved 12.6% year over year.
Arthur J. Gallagher’s total expenses increased 8% year over year to $1.9 billion in the reported quarter due to higher compensation, operating, interest, amortization and change in estimated acquisition earnout payables.
Adjusted earnings before interest, tax, depreciation and amortization and change (EBITDAC) in estimated acquisition earnout payables increased 37.6% from the prior-year quarter to $856.5 million.
Segmental Results
Brokerage: Revenues of $2.1 billion increased 33.3% year over year on higher commissions, fees, supplemental revenues and contingent revenues. Expenses jumped 33.1% from the year-ago quarter to $1.5 billion due to higher compensation, operating, depreciation, amortization and change in estimated acquisition earnout payables.
Adjusted EBITDAC climbed 34.9% from the year-ago level to $844 million and the margin expanded 50 basis points (bps) to 39.8%.
Risk Management: Revenues were up 18.8% year over year to $259.1 million, mainly owing to higher fees.
Expenses rose 12.7% from the prior-year period to $257.6 million on higher compensation and operating expenses.
Adjusted EBITDAC improved 11.7% year over year to $44.9 million and margin contracted 110 bps to 17.3%.
Corporate: Total revenues of $22.8 million were down 92.4% year over year due to lower revenues from consolidated clean coal facilities and lower royalty income from clean coal licenses.
EBITDAC was a negative $32.4 million compared with a negative $43.4 million in the year-ago quarter.
Financial Update
As of Mar 31, 2022, total assets were $43.2 billion, up 29.4% from the 2021-end level.
At the end of the quarter, cash and cash equivalents of $528.6 million increased 31.3% from the 2021-end level.
As of Mar 31, 2022, shareholders’ equity increased 5.6% to $9 billion from the level on Dec 31, 2021.
Dividend Update
The board of directors approved a quarterly cash dividend of 51 cents per share. The dividend will be paid out on Jun 17, 2022 to shareholders of record on Jun 3.
Acquisition Update
In the quarter, Arthur J. Gallagher closed five acquisitions with estimated annualized revenues of about $32.2 million.
Brown & Brown, Inc.’s (BRO - Free Report) first-quarter 2022 adjusted earnings of 78 cents per share beat the Zacks Consensus Estimate by 4%. The bottom line improved 11.4% year over year. Commissions and fees grew 11.1% year over year to $904.3 million.
Organic revenues improved 7.8% to $846.4 million in the quarter under review. Investment income decreased 33.3% year over year to $0.2 million. EBITDAC was $319.1 million, up 9.4% year over year. EBITDAC margin contracted 50 basis points year over year to 35.3%.
Willis Towers Watson Public Limited Company (WTW - Free Report) delivered first-quarter 2022 adjusted earnings of $2.66 per share, which beat the Zacks Consensus Estimate by 5.9%. The bottom line improved 22% year over year.
Adjusted operating income was $371 million, up 9.7% year over year. Margin expanded 200 basis points bps to 17.2%. Adjusted EBITDA was $518 million, up 6% year over year. Adjusted EBITDA margin was 24%, up 210 bps.
Aon plc (AON - Free Report) reported first-quarter 2022 operating earnings of $4.83 per share, which missed the Zacks Consensus Estimate of $4.86. However, the bottom line climbed 13% year over year.
Total revenues improved 4% year over year to $3,670 million, which comprised organic revenue growth of 8%, partially offset by a 1% unfavorable impact from divestitures and a 3% unfavorable impact from foreign currency translation. The top line missed the consensus mark of $3,747 million.
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Arthur J. Gallagher (AJG) Q1 Earnings Beat Estimates, Rise Y/Y
Arthur J. Gallagher & Co. (AJG - Free Report) reported first-quarter 2022 adjusted net earnings of $2.81, which beat the Zacks Consensus Estimate by 1.4%. The bottom line increased 39.1% on a year-over-year basis.
Arthur J. Gallagher’s performance was driven by higher revenues across the Brokerage and Risk Management segments, partially offset by higher expenses.
Arthur J. Gallagher & Co. Price, Consensus and EPS Surprise
Arthur J. Gallagher & Co. price-consensus-eps-surprise-chart | Arthur J. Gallagher & Co. Quote
Operational Update
Total revenues of $2.4 billion missed the Zacks Consensus Estimate by 2.8%. The top line however improved 12.6% year over year.
Arthur J. Gallagher’s total expenses increased 8% year over year to $1.9 billion in the reported quarter due to higher compensation, operating, interest, amortization and change in estimated acquisition earnout payables.
Adjusted earnings before interest, tax, depreciation and amortization and change (EBITDAC) in estimated acquisition earnout payables increased 37.6% from the prior-year quarter to $856.5 million.
Segmental Results
Brokerage: Revenues of $2.1 billion increased 33.3% year over year on higher commissions, fees, supplemental revenues and contingent revenues.
Expenses jumped 33.1% from the year-ago quarter to $1.5 billion due to higher compensation, operating, depreciation, amortization and change in estimated acquisition earnout payables.
Adjusted EBITDAC climbed 34.9% from the year-ago level to $844 million and the margin expanded 50 basis points (bps) to 39.8%.
Risk Management: Revenues were up 18.8% year over year to $259.1 million, mainly owing to higher fees.
Expenses rose 12.7% from the prior-year period to $257.6 million on higher compensation and operating expenses.
Adjusted EBITDAC improved 11.7% year over year to $44.9 million and margin contracted 110 bps to 17.3%.
Corporate: Total revenues of $22.8 million were down 92.4% year over year due to lower revenues from consolidated clean coal facilities and lower royalty income from clean coal licenses.
EBITDAC was a negative $32.4 million compared with a negative $43.4 million in the year-ago quarter.
Financial Update
As of Mar 31, 2022, total assets were $43.2 billion, up 29.4% from the 2021-end level.
At the end of the quarter, cash and cash equivalents of $528.6 million increased 31.3% from the 2021-end level.
As of Mar 31, 2022, shareholders’ equity increased 5.6% to $9 billion from the level on Dec 31, 2021.
Dividend Update
The board of directors approved a quarterly cash dividend of 51 cents per share. The dividend will be paid out on Jun 17, 2022 to shareholders of record on Jun 3.
Acquisition Update
In the quarter, Arthur J. Gallagher closed five acquisitions with estimated annualized revenues of about $32.2 million.
Zacks Rank and Performance of Other Insurers
Currently, Arthur J. Gallagher carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Brown & Brown, Inc.’s (BRO - Free Report) first-quarter 2022 adjusted earnings of 78 cents per share beat the Zacks Consensus Estimate by 4%. The bottom line improved 11.4% year over year. Commissions and fees grew 11.1% year over year to $904.3 million.
Organic revenues improved 7.8% to $846.4 million in the quarter under review. Investment income decreased 33.3% year over year to $0.2 million. EBITDAC was $319.1 million, up 9.4% year over year. EBITDAC margin contracted 50 basis points year over year to 35.3%.
Willis Towers Watson Public Limited Company (WTW - Free Report) delivered first-quarter 2022 adjusted earnings of $2.66 per share, which beat the Zacks Consensus Estimate by 5.9%. The bottom line improved 22% year over year.
Adjusted operating income was $371 million, up 9.7% year over year. Margin expanded 200 basis points bps to 17.2%. Adjusted EBITDA was $518 million, up 6% year over year. Adjusted EBITDA margin was 24%, up 210 bps.
Aon plc (AON - Free Report) reported first-quarter 2022 operating earnings of $4.83 per share, which missed the Zacks Consensus Estimate of $4.86. However, the bottom line climbed 13% year over year.
Total revenues improved 4% year over year to $3,670 million, which comprised organic revenue growth of 8%, partially offset by a 1% unfavorable impact from divestitures and a 3% unfavorable impact from foreign currency translation. The top line missed the consensus mark of $3,747 million.