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.
Arthur J. Gallagher (AJG) Q4 Earnings Beat, Increase Y/Y
Read MoreHide Full Article
Arthur J. Gallagher & Co. (AJG - Free Report) reported fourth-quarter 2022 adjusted net earnings of $1.54 per share, which beat the Zacks Consensus Estimate by 2.7% and our estimate of $1.49. Moreover, the bottom line increased about 18.5% on a year-over-year basis.
The company’s performance was driven by higher adjusted revenues and margin expansion across the Brokerage and the Risk Management segments, offset by higher expenses.
Arthur J. Gallagher & Co. Price, Consensus and EPS Surprise
Total revenues were $1.9 billion, up 2.8% year over year, primarily driven by higher commissions, fees and supplemental and contingent revenues. Moreover, the top line beat the Zacks Consensus Estimate by 2.7%.
Arthur J. Gallagher’s total expense increased 2.5% year over year to $1.9 billion, attributed to higher compensation, higher operating cost, higher interest, amortization and change in estimated acquisition earnout payables. The figure is higher than our estimate of $1.5 billion.
Adjusted earnings before interest, tax, depreciation and amortization and change in estimated acquisition earnout payables (EBITDAC) grew 25.9% from the prior-year quarter to $528.1 million. The figure is lower than our estimate of $576.4 million.
Segment Results
Brokerage: Adjusted revenues of $1.6 billion increased 20.6% year over year on higher commissions, fees and supplemental and contingent revenues. Adjusted EBITDAC climbed 25.4% from the prior-year quarter to $530.9 million while margin expanded 120 basis points (bps) to 31.3%.
Expenses increased 21.9% to $1.5 billion driven by higher compensation, operating, depreciation, amortization and change in estimated acquisition earnout payables.
Risk Management: Adjusted revenues were up 16.2% year over year to $289.7 million on higher fees.
Adjusted EBITDAC increased 21.5% year over year to $55.8 million while margin expanded 90 bps to 19.3%.
Expenses increased 8.6% to $274.2 million because of higher compensation and operating cost.
Corporate: EBITDAC was negative $58.6 million compared with negative $49.8 million in the year-ago quarter.
Financial Update
As of Dec 31, 2022, total assets were $38.9 billion, up 16.7% from the 2021-end level. Cash and cash equivalents at year-end decreased 15% from the 2021 level to $342.3 million.
Shareholders’ equity increased 7.4% from Dec 31, 2021 to $9.2 billion as of Dec 31, 2022.
Acquisition Update
In the quarter, the company closed 17 acquisitions with estimated annualized revenues of $141.3 million.
Full-Year Update
For the year, the company’s total revenues increased 4.2% year over year to $8.4 billion.
In 2022, the company closed a total of 36 buyouts with estimated annualized revenues of $244 million.
Adjusted earnings for the full year were $7.74 per share, up 13.6% year over year.
The Travelers Companies, Inc. (TRV - Free Report) reported fourth-quarter 2022 core income of $3.40 per share, which matched the Zacks Consensus Estimate. The bottom line decreased 35% year over year. Total revenues increased 7.5% from the year-ago quarter to about $9.6 billion, primarily driven by higher premiums and fee income. The top-line figure beat the Zacks Consensus Estimate by 0.2%.
Net written premiums increased 10% year over year to $8.8 billion. The figure was higher than our estimate of $8.6 billion. Catastrophe losses totaled $459 million pre-tax, wider than $36 million pre-tax in the prior-year quarter. Travelers witnessed an underwriting gain of $449 million, down 51.5% year over year. The combined ratio deteriorated 650 bps year over year to 94.5.
The Progressive Corporation’s (PGR - Free Report) fourth-quarter 2022 earnings per share of $1.50 beat the Zacks Consensus Estimate of $1.49 as well as our estimate of $1.34. The bottom line improved 42.9% year over year.
Net premiums earned grew 11% to $12.9 billion and beat our estimate of $12.3 billion. The combined ratio — the percentage of premiums paid out as claims and expenses — improved 80 bps from the prior-year quarter’s level to 93.9.
RLI Corp. (RLI - Free Report) reported fourth-quarter 2022 operating earnings of $1.53 per share, beating the Zacks Consensus Estimate by 41.7%. The bottom line improved 26.4% from the prior-year quarter. Operating revenues for the reported quarter were $329.5 million, up 19.4% year over year. The top line beat the Zacks Consensus Estimate by 0.4%.
Gross premiums written increased 14% year over year to $383.8 million. Underwriting income of $54 million increased 8.7%, primarily driven by the higher profitability at its Property segment. The combined ratio deteriorated 140 bps year over year to 82.1.
See More Zacks Research for These Tickers
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Arthur J. Gallagher (AJG) Q4 Earnings Beat, Increase Y/Y
Arthur J. Gallagher & Co. (AJG - Free Report) reported fourth-quarter 2022 adjusted net earnings of $1.54 per share, which beat the Zacks Consensus Estimate by 2.7% and our estimate of $1.49. Moreover, the bottom line increased about 18.5% on a year-over-year basis.
The company’s performance was driven by higher adjusted revenues and margin expansion across the Brokerage and the Risk Management segments, offset by higher expenses.
Arthur J. Gallagher & Co. Price, Consensus and EPS Surprise
Arthur J. Gallagher & Co. price-consensus-eps-surprise-chart | Arthur J. Gallagher & Co. Quote
Operational Update
Total revenues were $1.9 billion, up 2.8% year over year, primarily driven by higher commissions, fees and supplemental and contingent revenues. Moreover, the top line beat the Zacks Consensus Estimate by 2.7%.
Arthur J. Gallagher’s total expense increased 2.5% year over year to $1.9 billion, attributed to higher compensation, higher operating cost, higher interest, amortization and change in estimated acquisition earnout payables. The figure is higher than our estimate of $1.5 billion.
Adjusted earnings before interest, tax, depreciation and amortization and change in estimated acquisition earnout payables (EBITDAC) grew 25.9% from the prior-year quarter to $528.1 million. The figure is lower than our estimate of $576.4 million.
Segment Results
Brokerage: Adjusted revenues of $1.6 billion increased 20.6% year over year on higher commissions, fees and supplemental and contingent revenues.
Adjusted EBITDAC climbed 25.4% from the prior-year quarter to $530.9 million while margin expanded 120 basis points (bps) to 31.3%.
Expenses increased 21.9% to $1.5 billion driven by higher compensation, operating, depreciation, amortization and change in estimated acquisition earnout payables.
Risk Management: Adjusted revenues were up 16.2% year over year to $289.7 million on higher fees.
Adjusted EBITDAC increased 21.5% year over year to $55.8 million while margin expanded 90 bps to 19.3%.
Expenses increased 8.6% to $274.2 million because of higher compensation and operating cost.
Corporate: EBITDAC was negative $58.6 million compared with negative $49.8 million in the year-ago quarter.
Financial Update
As of Dec 31, 2022, total assets were $38.9 billion, up 16.7% from the 2021-end level. Cash and cash equivalents at year-end decreased 15% from the 2021 level to $342.3 million.
Shareholders’ equity increased 7.4% from Dec 31, 2021 to $9.2 billion as of Dec 31, 2022.
Acquisition Update
In the quarter, the company closed 17 acquisitions with estimated annualized revenues of $141.3 million.
Full-Year Update
For the year, the company’s total revenues increased 4.2% year over year to $8.4 billion.
In 2022, the company closed a total of 36 buyouts with estimated annualized revenues of $244 million.
Adjusted earnings for the full year were $7.74 per share, up 13.6% year over year.
Zacks Rank
Currently, 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 Insurers
The Travelers Companies, Inc. (TRV - Free Report) reported fourth-quarter 2022 core income of $3.40 per share, which matched the Zacks Consensus Estimate. The bottom line decreased 35% year over year. Total revenues increased 7.5% from the year-ago quarter to about $9.6 billion, primarily driven by higher premiums and fee income. The top-line figure beat the Zacks Consensus Estimate by 0.2%.
Net written premiums increased 10% year over year to $8.8 billion. The figure was higher than our estimate of $8.6 billion. Catastrophe losses totaled $459 million pre-tax, wider than $36 million pre-tax in the prior-year quarter. Travelers witnessed an underwriting gain of $449 million, down 51.5% year over year. The combined ratio deteriorated 650 bps year over year to 94.5.
The Progressive Corporation’s (PGR - Free Report) fourth-quarter 2022 earnings per share of $1.50 beat the Zacks Consensus Estimate of $1.49 as well as our estimate of $1.34. The bottom line improved 42.9% year over year.
Net premiums earned grew 11% to $12.9 billion and beat our estimate of $12.3 billion. The combined ratio — the percentage of premiums paid out as claims and expenses — improved 80 bps from the prior-year quarter’s level to 93.9.
RLI Corp. (RLI - Free Report) reported fourth-quarter 2022 operating earnings of $1.53 per share, beating the Zacks Consensus Estimate by 41.7%. The bottom line improved 26.4% from the prior-year quarter. Operating revenues for the reported quarter were $329.5 million, up 19.4% year over year. The top line beat the Zacks Consensus Estimate by 0.4%.
Gross premiums written increased 14% year over year to $383.8 million. Underwriting income of $54 million increased 8.7%, primarily driven by the higher profitability at its Property segment. The combined ratio deteriorated 140 bps year over year to 82.1.