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Arthur J. (AJG) to Report Q1 Earnings: What's in the Cards?
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Arthur J. Gallagher & Co. (AJG - Free Report) is slated to report first-quarter 2023 earnings on Apr 27, after market close. The insurer delivered an earnings surprise in each of the last four reported quarters, the average being 2.07%.
Factors to Consider
Solid results in both segments aided by new business, strong retention and renewal premium increases across its business lines are likely to benefit Arthur J. Gallagher’s first-quarter results.
Revenues associated with acquisitions and organic revenue growth are likely to have favored commission and fee revenues in the first quarter of 2023. The Zacks Consensus Estimate for fees is pegged at $718.8 million, indicating an increase of 9.8% from the prior-year period’s reported number. The consensus mark for commissions stands at $1.1 billion, implying 12.6% growth from the prior-year period’s reported number.
We estimate fees of $736.1 million, up 13.1% and commission of $1.7 billion, up 7.3% in the to-be-reported quarter.
The employee benefit brokerage and consulting business is likely to have been aided by new business and strong retention.
Improved interest rates are likely to have benefited net investment income. We expect an investment income of $44.1 million in the to-be-reported quarter. The Zacks Consensus Estimate for net investment income is pegged at $46.4 million.
Organic commission, fee, supplemental revenues, contingent revenues, investment income as well as strategic mergers and acquisitions are likely to have driven the top line in the to-be-reported quarter. We expect revenues of $2.6 billion in the to-be-reported quarter. The Zacks Consensus Estimate for first-quarter revenues stands at $2.7 billion, indicating an increase of 10.9% from the year-ago reported figure.
Total expenses are likely to have increased mainly because of higher compensation and operating cost, higher cost of revenues from clean coal activities, increased amortization and change in estimated acquisition earnout payables. We expect total expense of $2 billion in the to-be-reported quarter.
The Zacks Consensus Estimate for first-quarter earnings per share stands at $3.00, indicating an increase of 6.8% from the year-ago reported figure. We estimate the bottom line to be $2.98.
What the Zacks Model Says
Our proven model does not conclusively predict an earnings beat for Arthur J. Gallagher this time around. This is because a stock needs to have the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) that increases the odds of an earnings beat. This is not the case here.
Earnings ESP: Arthur J. Gallagher has an Earnings ESP of -0.48%. This is because the Most Accurate Estimate of $2.99 is pegged lower than the Zacks Consensus Estimate of $3.00. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
AON’s earnings beat estimates in three of the last four reported quarters, while missing in one.
Marsh & McLennan Companies, Inc. (MMC - Free Report) has an Earnings ESP of +0.06% and a Zacks Rank #3. The Zacks Consensus Estimate for first-quarter 2023 earnings is pegged at $2.18, indicating an increase of 15.3% from the year-ago reported figure.
MMC’s earnings beat estimates in the last four reported quarters.
CNO Financial Group (CNO - Free Report) has an Earnings ESP of +5.65% and sports a Zacks Rank of 1. The Zacks Consensus Estimate for first-quarter 2023 earnings is pegged at 62 cents, indicating an increase of 47.6% from the year-ago reported figure.
CNO’s earnings beat estimates in two of the last four reported quarters, while missing in one and meeting estimates in one.
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Arthur J. (AJG) to Report Q1 Earnings: What's in the Cards?
Arthur J. Gallagher & Co. (AJG - Free Report) is slated to report first-quarter 2023 earnings on Apr 27, after market close. The insurer delivered an earnings surprise in each of the last four reported quarters, the average being 2.07%.
Factors to Consider
Solid results in both segments aided by new business, strong retention and renewal premium increases across its business lines are likely to benefit Arthur J. Gallagher’s first-quarter results.
Revenues associated with acquisitions and organic revenue growth are likely to have favored commission and fee revenues in the first quarter of 2023. The Zacks Consensus Estimate for fees is pegged at $718.8 million, indicating an increase of 9.8% from the prior-year period’s reported number. The consensus mark for commissions stands at $1.1 billion, implying 12.6% growth from the prior-year period’s reported number.
We estimate fees of $736.1 million, up 13.1% and commission of $1.7 billion, up 7.3% in the to-be-reported quarter.
The employee benefit brokerage and consulting business is likely to have been aided by new business and strong retention.
Improved interest rates are likely to have benefited net investment income. We expect an investment income of $44.1 million in the to-be-reported quarter. The Zacks Consensus Estimate for net investment income is pegged at $46.4 million.
Organic commission, fee, supplemental revenues, contingent revenues, investment income as well as strategic mergers and acquisitions are likely to have driven the top line in the to-be-reported quarter. We expect revenues of $2.6 billion in the to-be-reported quarter. The Zacks Consensus Estimate for first-quarter revenues stands at $2.7 billion, indicating an increase of 10.9% from the year-ago reported figure.
Total expenses are likely to have increased mainly because of higher compensation and operating cost, higher cost of revenues from clean coal activities, increased amortization and change in estimated acquisition earnout payables. We expect total expense of $2 billion in the to-be-reported quarter.
The Zacks Consensus Estimate for first-quarter earnings per share stands at $3.00, indicating an increase of 6.8% from the year-ago reported figure. We estimate the bottom line to be $2.98.
What the Zacks Model Says
Our proven model does not conclusively predict an earnings beat for Arthur J. Gallagher this time around. This is because a stock needs to have the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) that increases the odds of an earnings beat. This is not the case here.
Earnings ESP: Arthur J. Gallagher has an Earnings ESP of -0.48%. This is because the Most Accurate Estimate of $2.99 is pegged lower than the Zacks Consensus Estimate of $3.00. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Arthur J. Gallagher & Co. Price and EPS Surprise
Arthur J. Gallagher & Co. price-eps-surprise | Arthur J. Gallagher & Co. Quote
Zacks Rank: Arthur J. Gallagher currently carries a Zacks Rank #4 (Sell).
Stocks to Consider
Some insurance stocks with the right combination of elements to come up with an earnings beat this time around are:
Aon plc (AON - Free Report) has an Earnings ESP of +0.80% and a Zacks Rank of 3. The Zacks Consensus Estimate for first-quarter 2023 earnings is pegged at $5.26, indicating an increase of 8.9% from the year-ago reported figure. You can see the complete list of today’s Zacks #1 Rank stocks here.
AON’s earnings beat estimates in three of the last four reported quarters, while missing in one.
Marsh & McLennan Companies, Inc. (MMC - Free Report) has an Earnings ESP of +0.06% and a Zacks Rank #3. The Zacks Consensus Estimate for first-quarter 2023 earnings is pegged at $2.18, indicating an increase of 15.3% from the year-ago reported figure.
MMC’s earnings beat estimates in the last four reported quarters.
CNO Financial Group (CNO - Free Report) has an Earnings ESP of +5.65% and sports a Zacks Rank of 1. The Zacks Consensus Estimate for first-quarter 2023 earnings is pegged at 62 cents, indicating an increase of 47.6% from the year-ago reported figure.
CNO’s earnings beat estimates in two of the last four reported quarters, while missing in one and meeting estimates in one.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.