We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Brown & Brown (BRO) Q3 Earnings Top on Higher Revenues
Read MoreHide Full Article
Brown & Brown Inc. (BRO - Free Report) reported third-quarter 2016 earnings per share of 52 cents per share, 3 cents above the Zacks Consensus Estimate. Moreover, reported earnings showed a 10.6% year-over-year improvement driven by higher revenues.
Including the change in estimated acquisition earn-out payables of 2 cents, quarterly earnings were 50 cents per share, up 6.4% year over year.
Behind the Headlines
Total revenue in the quarter amounted to $462.3 million, which missed the Zacks Consensus Estimate of $453 million by nearly 2%. However, the top line improved 7% year over year on higher commissions and fees, and other income. Organic revenue growth was 4.3% in the reported quarter.
Commissions and fees climbed nearly 8.5% to $450.5 million on the back of higher commissions across the four divisions – National Program, Services, Wholesale Brokerage and Retail.
National Program commission grew 7%, Services commission increased 7.9%, Wholesale Brokerage commission improved 23% and Retail commission was up 5.7%.
Investment income declined 50% year over year to $0.1 million in the quarter.
Total expense increased 8.2% to $345.5 million due to a rise in employee compensation and benefits, other operating expenses, and higher interest expenses.
The rise in expenses offset top-line improvement, resulting in a 3.4% decrease in pre-tax income.
Net income before interest, income taxes, depreciation, amortization and the change in estimated acquisition earn-out payables (EBITDAC) margin contracted 90 basis points to 34%.
Financial Update
Brown & Brown exited the third quarter with cash and cash equivalents of $767 million, up about 14% from 2015 end.
Long-term debt was $1.03 billion as of Sep 30, 2016, reflecting a 3.7% improvement from $1.5 billion at the end of 2015.
Dividend Update
Brown & Brown’s board of directors declared a quarterly cash dividend of 13.50 cents per share on Oct 12, which will be paid on Nov 9 to shareholders on record as of Oct 28. This reflects an increase of 10.2% over the prior payout.
Among other players in the insurance industry that have reported their third-quarter earnings so far, earnings at Progressive Corp. (PGR - Free Report) and MGIC Investment Corp. (MTG - Free Report) beat their respective Zacks Consensus Estimate, while RLI Corp. (RLI - Free Report) missed the same.
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Brown & Brown (BRO) Q3 Earnings Top on Higher Revenues
Brown & Brown Inc. (BRO - Free Report) reported third-quarter 2016 earnings per share of 52 cents per share, 3 cents above the Zacks Consensus Estimate. Moreover, reported earnings showed a 10.6% year-over-year improvement driven by higher revenues.
Including the change in estimated acquisition earn-out payables of 2 cents, quarterly earnings were 50 cents per share, up 6.4% year over year.
Behind the Headlines
Total revenue in the quarter amounted to $462.3 million, which missed the Zacks Consensus Estimate of $453 million by nearly 2%. However, the top line improved 7% year over year on higher commissions and fees, and other income. Organic revenue growth was 4.3% in the reported quarter.
Commissions and fees climbed nearly 8.5% to $450.5 million on the back of higher commissions across the four divisions – National Program, Services, Wholesale Brokerage and Retail.
National Program commission grew 7%, Services commission increased 7.9%, Wholesale Brokerage commission improved 23% and Retail commission was up 5.7%.
Investment income declined 50% year over year to $0.1 million in the quarter.
Total expense increased 8.2% to $345.5 million due to a rise in employee compensation and benefits, other operating expenses, and higher interest expenses.
The rise in expenses offset top-line improvement, resulting in a 3.4% decrease in pre-tax income.
Net income before interest, income taxes, depreciation, amortization and the change in estimated acquisition earn-out payables (EBITDAC) margin contracted 90 basis points to 34%.
Financial Update
Brown & Brown exited the third quarter with cash and cash equivalents of $767 million, up about 14% from 2015 end.
Long-term debt was $1.03 billion as of Sep 30, 2016, reflecting a 3.7% improvement from $1.5 billion at the end of 2015.
Dividend Update
Brown & Brown’s board of directors declared a quarterly cash dividend of 13.50 cents per share on Oct 12, which will be paid on Nov 9 to shareholders on record as of Oct 28. This reflects an increase of 10.2% over the prior payout.
BROWN & BROWN Price, Consensus and EPS Surprise
BROWN & BROWN Price, Consensus and EPS Surprise | BROWN & BROWN Quote
Performance of Other Insurers
Among other players in the insurance industry that have reported their third-quarter earnings so far, earnings at Progressive Corp. (PGR - Free Report) and MGIC Investment Corp. (MTG - Free Report) beat their respective Zacks Consensus Estimate, while RLI Corp. (RLI - Free Report) missed the same.
Zacks Rank
Brown & Brown presently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>