Arthur J. Gallagher & Co.’s (AJG - Free Report) third-quarter 2022 adjusted net earnings of $1.72 beat the Zacks Consensus Estimate by 3% and our estimate of $1.70. The bottom line increased 29.3% on a year-over-year basis.
Arthur J. Gallagher’s performance was driven by lower expenses and higher revenues across the Brokerage and Risk Management segments.
Arthur J. Gallagher & Co. Price, Consensus and EPS Surprise
Operational Update
Total revenues of $2 billion missed the Zacks Consensus Estimate by 1.3%. The top line declined 4.7% year over year.
Arthur J. Gallagher’s total expenses decreased 9.3% year over year to $1.7 billion in the reported quarter due to lower depreciation and change in estimated acquisition earnout payables. The figure is higher than our estimate of $1,662.3 million.
Adjusted earnings before interest, tax, depreciation and amortization and change (EBITDAC) in estimated acquisition earnout payables increased 7.5% from the prior-year quarter to $508.7 million. The figure, however, was lower than our estimate of $610.1 million.
Segmental Results
Brokerage: Revenues of $1.7 billion increased 15.8% year over year on higher commissions, fees, supplemental revenues, contingent revenues and investment income and net gains on divestitures. The figure missed the Zacks Consensus Estimate of $1,822.9 million
Expenses jumped 17.2% from the year-ago quarter to $1.4 billion due to higher compensation, operating expense, amortization and depreciation.
Adjusted EBITDAC climbed 1.5% from the year-ago level to $488.5 million. Margin contracted 120 basis points (bps) to 32.3%.
Risk Management: Revenues were up 9.6% year over year to $307.5 million, mainly owing to higher fees.
Expenses rose 7.9% from the prior-year period to $270.9 million on higher compensation and operating expenses.
Adjusted EBITDAC improved 8.2% year over year to $47.3 million and the margin contracted 130 bps to 18.2%.
Corporate: Total revenues were $0.3 million versus $337.3 million in the year-ago quarter.
EBITDAC was a negative $27.1 million compared with a negative $51.5 million in the year-ago quarter.
Financial Update
As of Sep 30, 2022, total assets were $38.7 billion, up 16% from the 2021-end level.
At the end of the quarter, cash and cash equivalents of $553.7 million increased 37.5% from the 2021-end level.
As of Sep 30, 2022, shareholders’ equity increased 0.8% to $8.6 billion from the level on Dec 31, 2021.
Dividend Update
AJG paid out a quarterly cash dividend of 51 cents per share.
Acquisition Update
In the quarter, Arthur J. Gallagher closed six acquisitions with estimated annualized revenues of about $20.4 million.
Zacks Rank
Arthur J. Gallagher carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Insurance Brokers
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% and decreased 13.8% year over year. Total revenues of $927.6 million missed the Zacks Consensus Estimate by 1.9% but improved 20.4% year over year.
Organic revenues improved 6.7% to $799.1 million. BRO’s adjusted EBITDAC was $289.8 million, up 5.8% year over year. EBITDAC margin contracted 440 bps year over year to 31.2%.
Willis Towers Watson Public Limited Company (WTW - Free Report) delivered third-quarter 2022 adjusted earnings of $2.20 per share, which beat the Zacks Consensus Estimate by 2.8% and improved 27.2% year over year. Adjusted revenues of $1.9 billion declined 1% year over year and missed the Zacks Consensus Estimate by 1.6%.
WTW’s adjusted operating income was $384 million, up 7.5% year over year. Margin expanded 110 bps to 14.5%. Adjusted EBITDA was $408 million, down 1.7% year over year. Adjusted EBITDA margin was 20.9%, down 10 bps.
Willis Towers expects to deliver mid-single-digit organic revenue growth and adjusted operating margin expansion for 2022.
Marsh & McLennan Companies, Inc. (MMC - Free Report) reported third-quarter 2022 adjusted earnings per share of $1.18 that outpaced the Zacks Consensus Estimate by 1.7% and rose 9% year over year. Revenues amounted to $4.8 billion, which grew 4% year over year but fell short of the consensus mark by 1.7%.
MMC’s consolidated adjusted operating income of $851 million climbed 12% year over year.
4 Oil Stocks with Massive Upsides
Global demand for oil is through the roof... and oil producers are struggling to keep up. So even though oil prices are well off their recent highs, you can expect big profits from the companies that supply the world with "black gold."
Zacks Investment Research has just released an urgent special report to help you bank on this trend.
In Oil Market on Fire, you'll discover 4 unexpected oil and gas stocks positioned for big gains in the coming weeks and months. You don't want to miss these recommendations.
Download your free report now to see them.
Arthur J. Gallagher & Co.’s (AJG - Free Report) third-quarter 2022 adjusted net earnings of $1.72 beat the Zacks Consensus Estimate by 3% and our estimate of $1.70. The bottom line increased 29.3% on a year-over-year basis.
Arthur J. Gallagher’s performance was driven by lower expenses and higher revenues across the Brokerage and Risk Management segments.
Arthur J. Gallagher & Co. Price, Consensus and EPS Surprise
Operational Update
Total revenues of $2 billion missed the Zacks Consensus Estimate by 1.3%. The top line declined 4.7% year over year.
Arthur J. Gallagher’s total expenses decreased 9.3% year over year to $1.7 billion in the reported quarter due to lower depreciation and change in estimated acquisition earnout payables. The figure is higher than our estimate of $1,662.3 million.
Adjusted earnings before interest, tax, depreciation and amortization and change (EBITDAC) in estimated acquisition earnout payables increased 7.5% from the prior-year quarter to $508.7 million. The figure, however, was lower than our estimate of $610.1 million.
Segmental Results
Brokerage: Revenues of $1.7 billion increased 15.8% year over year on higher commissions, fees, supplemental revenues, contingent revenues and investment income and net gains on divestitures. The figure missed the Zacks Consensus Estimate of $1,822.9 million
Expenses jumped 17.2% from the year-ago quarter to $1.4 billion due to higher compensation, operating expense, amortization and depreciation.
Adjusted EBITDAC climbed 1.5% from the year-ago level to $488.5 million. Margin contracted 120 basis points (bps) to 32.3%.
Risk Management: Revenues were up 9.6% year over year to $307.5 million, mainly owing to higher fees.
Expenses rose 7.9% from the prior-year period to $270.9 million on higher compensation and operating expenses.
Adjusted EBITDAC improved 8.2% year over year to $47.3 million and the margin contracted 130 bps to 18.2%.
Corporate: Total revenues were $0.3 million versus $337.3 million in the year-ago quarter.
EBITDAC was a negative $27.1 million compared with a negative $51.5 million in the year-ago quarter.
Financial Update
As of Sep 30, 2022, total assets were $38.7 billion, up 16% from the 2021-end level.
At the end of the quarter, cash and cash equivalents of $553.7 million increased 37.5% from the 2021-end level.
As of Sep 30, 2022, shareholders’ equity increased 0.8% to $8.6 billion from the level on Dec 31, 2021.
Dividend Update
AJG paid out a quarterly cash dividend of 51 cents per share.
Acquisition Update
In the quarter, Arthur J. Gallagher closed six acquisitions with estimated annualized revenues of about $20.4 million.
Zacks Rank
Arthur J. Gallagher carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Insurance Brokers
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% and decreased 13.8% year over year. Total revenues of $927.6 million missed the Zacks Consensus Estimate by 1.9% but improved 20.4% year over year.
Organic revenues improved 6.7% to $799.1 million. BRO’s adjusted EBITDAC was $289.8 million, up 5.8% year over year. EBITDAC margin contracted 440 bps year over year to 31.2%.
Willis Towers Watson Public Limited Company (WTW - Free Report) delivered third-quarter 2022 adjusted earnings of $2.20 per share, which beat the Zacks Consensus Estimate by 2.8% and improved 27.2% year over year. Adjusted revenues of $1.9 billion declined 1% year over year and missed the Zacks Consensus Estimate by 1.6%.
WTW’s adjusted operating income was $384 million, up 7.5% year over year. Margin expanded 110 bps to 14.5%. Adjusted EBITDA was $408 million, down 1.7% year over year. Adjusted EBITDA margin was 20.9%, down 10 bps.
Willis Towers expects to deliver mid-single-digit organic revenue growth and adjusted operating margin expansion for 2022.
Marsh & McLennan Companies, Inc. (MMC - Free Report) reported third-quarter 2022 adjusted earnings per share of $1.18 that outpaced the Zacks Consensus Estimate by 1.7% and rose 9% year over year. Revenues amounted to $4.8 billion, which grew 4% year over year but fell short of the consensus mark by 1.7%.
MMC’s consolidated adjusted operating income of $851 million climbed 12% year over year.
4 Oil Stocks with Massive Upsides
Global demand for oil is through the roof... and oil producers are struggling to keep up. So even though oil prices are well off their recent highs, you can expect big profits from the companies that supply the world with "black gold."
Zacks Investment Research has just released an urgent special report to help you bank on this trend.
In Oil Market on Fire, you'll discover 4 unexpected oil and gas stocks positioned for big gains in the coming weeks and months. You don't want to miss these recommendations.
Download your free report now to see them.
Get the latest research report on MMC - FREE
Get the latest research report on AJG - FREE
Get the latest research report on BRO - FREE
Get the latest research report on WTW - FREE