Brown & Brown, Inc.’s (BRO - Free Report) third-quarter 2022 adjusted earnings of 50 cents per share missed the Zacks Consensus Estimate by 16.7%. The bottom line decreased 13.8% year over year.
The quarterly results benefited from improved organic growth and higher net investment income, partly offset by higher expenses.
Q3 in Details
Total revenues of $927.6 million missed the Zacks Consensus Estimate by 1.9%. The top line however improved 20.4% year over year. The upside can primarily be attributed to increased commission and fees, which grew 20.2% year over year to $925.2 million.
Organic revenues improved 6.7% to $799.1 million in the quarter under review.
Investment income increased two-fold year over year to $1.2 million.
Adjusted EBITDAC was $289.8 million, up 5.8% year over year. EBITDAC margin contracted 440 basis points year over year to 31.2%.
Total expenses increased 23.7% to $709.6 million due to a rise in employee compensation and benefits, other operating expenses, amortization, depreciation and interest expenses.
Financial Update
Brown & Brown exited third-quarter 2022 with cash and cash equivalents of $579.5 million, down 16.4% from the 2021-end level.
Long-term debt of $4 billion as of Sep 30, 2022 more than doubled from 2021 end.
Net cash provided by operating activities in the first nine months of 2022 was $599.8 million, down 4.5% year over year.
Zacks Rank
Brown & Brown currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Insurers
Of the insurance industry players that have reported third-quarter results so far, The Travelers Companies (TRV - Free Report) and RLI Corp. (RLI - Free Report) beat the Zacks Consensus Estimate for earnings, while The Progressive Corporation (PGR - Free Report) missed the same.
Travelers’s third-quarter 2022 core income of $2.20 per share beat the Zacks Consensus Estimate by 24.3% but decreased 15.4% year over year. Total revenues increased 6.8% from the year-ago quarter to $9.4 billion and beat the Zacks Consensus Estimate by 2.5%.
Net written premiums increased 110% year over year to $9.2 billion. Underwriting gain of $115 million increased 53.3% year over year in the reported quarter. The combined ratio improved 40 bps year over year to 98.2.
RLI Corp.’s third-quarter 2022 operating earnings of 50 cents per share beat the Zacks Consensus Estimate by 51.5% but declined 23.1% from the prior-year quarter. Operating revenues increased 15.3% year over year to $312.7 million. The top line, however, missed the Zacks Consensus Estimate by 1.3%.
Gross premiums written increased 13.3% year over year to $403.8 million. This uptick can be attributed to the solid performance of Casualty (up 3.3%), Surety (up 12%) and Property segments (up 39.8%). Net investment income increased 19.2% year over year to $21.3 million.
Progressive’s earnings per share of 49 cents missed the Zacks Consensus Estimate of $1.24 as well as our estimate of $1.38. The bottom line, however, improved more than threefold from 14 cents earned in the year-ago quarter.
Net premiums written were $13 billion in the quarter, up 5% from $11.7 billion a year ago but missed our estimate of $14.2 billion. The combined ratio — the percentage of premiums paid out as claims and expenses — improved 120 bps from the prior-year quarter’s level to 99.2.
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Brown & Brown, Inc.’s (BRO - Free Report) third-quarter 2022 adjusted earnings of 50 cents per share missed the Zacks Consensus Estimate by 16.7%. The bottom line decreased 13.8% year over year.
The quarterly results benefited from improved organic growth and higher net investment income, partly offset by higher expenses.
Q3 in Details
Total revenues of $927.6 million missed the Zacks Consensus Estimate by 1.9%. The top line however improved 20.4% year over year. The upside can primarily be attributed to increased commission and fees, which grew 20.2% year over year to $925.2 million.
Organic revenues improved 6.7% to $799.1 million in the quarter under review.
Investment income increased two-fold year over year to $1.2 million.
Adjusted EBITDAC was $289.8 million, up 5.8% year over year. EBITDAC margin contracted 440 basis points year over year to 31.2%.
Total expenses increased 23.7% to $709.6 million due to a rise in employee compensation and benefits, other operating expenses, amortization, depreciation and interest expenses.
Financial Update
Brown & Brown exited third-quarter 2022 with cash and cash equivalents of $579.5 million, down 16.4% from the 2021-end level.
Long-term debt of $4 billion as of Sep 30, 2022 more than doubled from 2021 end.
Net cash provided by operating activities in the first nine months of 2022 was $599.8 million, down 4.5% year over year.
Zacks Rank
Brown & Brown currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Insurers
Of the insurance industry players that have reported third-quarter results so far, The Travelers Companies (TRV - Free Report) and RLI Corp. (RLI - Free Report) beat the Zacks Consensus Estimate for earnings, while The Progressive Corporation (PGR - Free Report) missed the same.
Travelers’s third-quarter 2022 core income of $2.20 per share beat the Zacks Consensus Estimate by 24.3% but decreased 15.4% year over year. Total revenues increased 6.8% from the year-ago quarter to $9.4 billion and beat the Zacks Consensus Estimate by 2.5%.
Net written premiums increased 110% year over year to $9.2 billion. Underwriting gain of $115 million increased 53.3% year over year in the reported quarter. The combined ratio improved 40 bps year over year to 98.2.
RLI Corp.’s third-quarter 2022 operating earnings of 50 cents per share beat the Zacks Consensus Estimate by 51.5% but declined 23.1% from the prior-year quarter. Operating revenues increased 15.3% year over year to $312.7 million. The top line, however, missed the Zacks Consensus Estimate by 1.3%.
Gross premiums written increased 13.3% year over year to $403.8 million. This uptick can be attributed to the solid performance of Casualty (up 3.3%), Surety (up 12%) and Property segments (up 39.8%). Net investment income increased 19.2% year over year to $21.3 million.
Progressive’s earnings per share of 49 cents missed the Zacks Consensus Estimate of $1.24 as well as our estimate of $1.38. The bottom line, however, improved more than threefold from 14 cents earned in the year-ago quarter.
Net premiums written were $13 billion in the quarter, up 5% from $11.7 billion a year ago but missed our estimate of $14.2 billion. The combined ratio — the percentage of premiums paid out as claims and expenses — improved 120 bps from the prior-year quarter’s level to 99.2.
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