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Why Is Brown & Brown (BRO) Up 2% Since Last Earnings Report?
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It has been about a month since the last earnings report for Brown & Brown (BRO - Free Report) . Shares have added about 2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Brown & Brown due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Brown & Brown Q4 Earnings & Revenues Top, Rise Y/Y
Brown & Brown reported adjusted fourth-quarter 2021 earnings of 42 cents per share, which came ahead of the Zacks Consensus Estimate by 10.5% as well as the year-ago figure by 31.2%.
The results reflect improved organic growth, margin expansion and higher commissions and fees, partly offset by increased expenses.
Behind the Headlines
Adjusted revenues of $739 million beat the Zacks Consensus Estimate by 1.5%. Moreover, the top line rose 15.1% year over year on higher commissions and fees. Organic revenues increased 9% in the reported quarter.
Commissions and fees grew 15.3% year over year to $737.9 million.
Investment income however plunged 80% year over year to $0.2 million.
Total expenses increased 16.9% to $597.7 million due to a rise in employee compensation and benefits, amortization, depreciation as well as other operating expenses.
EBITDAC was $215.7 million, up 24% year over year. EBITDAC margin expanded 210 basis points (bps) to 29.2%.
Full-Year Update
Full-year 2021 adjusted income of $2.19 per share beat the Zacks Consensus Estimate of $2.16. The bottom line increased 31.1% year over year.
Total revenues increased 16.7% from the year-ago quarter to $3.05 billion and beat the Zacks Consensus Estimate of $3.04 billion.
EBITDAC was $1.02 billion, up 25.5% from 2020 with margin expanding 240 bps to 33.5%.
Financial Update
Brown & Brown exited 2021 with cash and cash equivalents of $887.1 million, up about 8.5% from the 2020-end level.
Long-term debt of $1.9 billion as of Dec 31, 2021 was down 2.2% from 2020 end.
Net cash provided by operating activities in 2021 was $948 million, up 31.4% year over year.
Dividend Update
The company paid out a cash dividend of 10.25 cents per share in the fourth quarter.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
VGM Scores
Currently, Brown & Brown has a nice Growth Score of B, a grade with the same score on the momentum front. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Brown & Brown has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Brown & Brown (BRO) Up 2% Since Last Earnings Report?
It has been about a month since the last earnings report for Brown & Brown (BRO - Free Report) . Shares have added about 2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Brown & Brown due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Brown & Brown Q4 Earnings & Revenues Top, Rise Y/Y
Brown & Brown reported adjusted fourth-quarter 2021 earnings of 42 cents per share, which came ahead of the Zacks Consensus Estimate by 10.5% as well as the year-ago figure by 31.2%.
The results reflect improved organic growth, margin expansion and higher commissions and fees, partly offset by increased expenses.
Behind the Headlines
Adjusted revenues of $739 million beat the Zacks Consensus Estimate by 1.5%. Moreover, the top line rose 15.1% year over year on higher commissions and fees. Organic revenues increased 9% in the reported quarter.
Commissions and fees grew 15.3% year over year to $737.9 million.
Investment income however plunged 80% year over year to $0.2 million.
Total expenses increased 16.9% to $597.7 million due to a rise in employee compensation and benefits, amortization, depreciation as well as other operating expenses.
EBITDAC was $215.7 million, up 24% year over year. EBITDAC margin expanded 210 basis points (bps) to 29.2%.
Full-Year Update
Full-year 2021 adjusted income of $2.19 per share beat the Zacks Consensus Estimate of $2.16. The bottom line increased 31.1% year over year.
Total revenues increased 16.7% from the year-ago quarter to $3.05 billion and beat the Zacks Consensus Estimate of $3.04 billion.
EBITDAC was $1.02 billion, up 25.5% from 2020 with margin expanding 240 bps to 33.5%.
Financial Update
Brown & Brown exited 2021 with cash and cash equivalents of $887.1 million, up about 8.5% from the 2020-end level.
Long-term debt of $1.9 billion as of Dec 31, 2021 was down 2.2% from 2020 end.
Net cash provided by operating activities in 2021 was $948 million, up 31.4% year over year.
Dividend Update
The company paid out a cash dividend of 10.25 cents per share in the fourth quarter.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
VGM Scores
Currently, Brown & Brown has a nice Growth Score of B, a grade with the same score on the momentum front. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Brown & Brown has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.