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Brown & Brown (BRO) Q4 Earnings & Revenues Top, Rise Y/Y

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Brown & Brown (BRO - Free Report) reported adjusted fourth-quarter 2020 earnings of 32 cents per share, which came ahead of the Zacks Consensus Estimate as well as the year-ago figure by 14.3%.

The results reflect improved organic growth and margin expansion.

Behind the Headlines    

Adjusted revenues of $642 million beat the Zacks Consensus Estimate by 3.6%. Moreover, the top line rose 10.9% year over year on higher commissions and fees. Organic revenues increased 4.7% in the reported quarter.

Commissions and fees grew 10.9% year over year to $581.4 million.

Investment income however plunged 33.3% year over year to $1 million.

Total expenses increased 7.2% to $511.2 million due to a rise in employee compensation and amortization and depreciation as well as interest expense.

EBITDAC was $173.9 million, up 11.3% year over year. EBITDAC margin expanded 10 basis points (bps) to 27.1%.

Brown & Brown, Inc. Price, Consensus and EPS Surprise

Full-Year Update

Full-year 2020 adjusted income of $1.67 per share beat the Zacks Consensus Estimate of $1.64. The bottom line increased 19.3% year over year.

Total revenues increased 9.2% from the year-ago quarter to $2.61 billion and beat the Zacks Consensus Estimate of $2.59 billion.

EBITDAC was $813.4 million, up 13.5% from 2019 with margin expanding 110 bps to 31.1%.

Financial Update

Brown & Brown exited 2020 with cash and cash equivalents of $1.3 billion, up about 32.1% from 2019-end level.

Long-term debt of $2 billion as of Dec 31, 2020 was up 35% from 2019 end.

Net cash provided by operating activities in 2020 was $721.6 million, up 6.4% year over year.

Dividend Update

The company paid out cash dividend of 9.3 cents per share in the fourth quarter.

Zacks Rank

Brown & Brown currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Another Insurer

The Travelers Companies’ (TRV - Free Report) bottom line beat the Zacks Consensus Estimate in fourth quarter of 2020.

Upcoming Releases

The Progressive Corporation (PGR - Free Report) is set to release fourth-quarter 2020 earnings on Jan 27. The Zacks Consensus Estimate for the same stands at $1.68 per share.

RLI Corp (RLI - Free Report) is set to release fourth-quarter 2020 earnings on Jan 27. The Zacks Consensus Estimate for the same stands at 56 cents per share.

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