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Brown & Brown's (BRO) Q1 Earnings Top, Revenues Rise Y/Y
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Brown & Brown, Inc.’s (BRO - Free Report) first-quarter 2023 adjusted earnings of 84 cents per share beat the Zacks Consensus Estimate by 3.7%. The bottom line increased 13.5% year over year.
The quarterly results reflected improved organic growth and higher net investment income, partly offset by higher expenses.
Brown & Brown, Inc. Price, Consensus and EPS Surprise
Total revenues of $1.1 billion beat the Zacks Consensus Estimate by 5.1%. The top line improved 23.6% year over year. The upside can be primarily attributed to commission and fees, which grew 22.5% year over year to $1.1 million.
Organic revenues improved 12.6% to $967.3 million in the quarter under review.
Investment income increased year over year to $7 million from $0.2 million in the year-ago quarter.
Adjusted EBITDAC was $398.2 million, up 23.2% year over year. EBITDAC margin remained flat year over year at 35.7%.
Total expenses increased 28.5% to $821.8 million due to a rise in employee compensation and benefits, other operating expenses, amortization, depreciation and interest expenses.
Financial Update
Brown & Brown exited 2022 with cash and cash equivalents of $563.5 million, down 13.3% from the 2022-end level.
Long-term debt of $3.6 billion as of Mar 31, 2023 slipped 0.3% from 2022 end.
Net cash provided by operating activities in 2022 was $59.8.4 million, down 43.3% year over year.
Dividend Update
The board of directors approved a regular quarterly cash dividend of 11.50 cents per share to be paid out on May 17, 2023, to shareholders of record on May 8, 2023.
Zacks Rank
Brown & Brown currently carries a Zacks Rank #4 (Sell).
The Travelers Companies (TRV - Free Report) reported first-quarter 2022 core income of $4.11 per share, which beat the Zacks Consensus Estimate of $3.64 and our estimate of $3.41. However, the bottom line decreased 2.6% year over year. Travelers’ total revenues increased 10% from the year-ago quarter to $9.7 billion, primarily driven by higher premiums. The top-line figure however missed the Zacks Consensus Estimate of $9.8 billion.
Net written premiums increased 12% year over year to a record $9.4 billion, driven by strong growth across all three segments. The figure was higher than our estimate of $8.9 billion.
Catastrophe losses totaled $422 million, wider than $36 million pre-tax in the prior-year quarter. Catastrophe losses primarily resulted from severe wind and hail storms in multiple states. Travelers witnessed an underwriting gain of $501 million, down 12.9% year over year. The combined ratio deteriorated 410 bps year over year to 95.4
The Progressive Corporation’s (PGR - Free Report) first-quarter 2023 earnings per share of 65 cents missed the Zacks Consensus Estimate of $1.44 as well as our estimate of $1.50. The bottom line declined 20.7% year over year.
Operating revenues were about $14.2 billion, up 15.8% year over year. This improvement was driven by a 15% increase in premiums, 18.5% higher fees and other revenues, a 7.1% increase in service revenues and 73.2% higher investment income. The top line exceeded the Zacks Consensus Estimate of $14.1 billion and our estimate of $13.1 billion.
Net premiums earned grew 15% to $13.5 billion and beat our estimate of $12.6 billion. The combined ratio — the percentage of premiums paid out as claims and expenses — deteriorated 450 bps from the prior-year quarter’s level to 99.
RLI Corp. (RLI - Free Report) reported first-quarter 2023 operating earnings of $1.63 per share, beating the Zacks Consensus Estimate by 34.7%. The bottom line improved 14% from the prior-year quarter. Operating revenues for the reported quarter were $335 million, up 19.4% year over year, driven by 14.3% higher net premiums earned and 51.5% higher net investment income. The top line however missed the Zacks Consensus Estimate by 2.2%.
Gross premiums written increased 15.6% year over year to $415 million. This uptick can be attributed to the solid performance of the Casualty (up 1%), Property (up 45%) and Surety segments (up 13.6%). Underwriting income of $67.9 million increased 14.1%, primarily due to higher profitability in its Property and Casualty segment. Combined ratio remained flat year over year at 77.9.
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Brown & Brown's (BRO) Q1 Earnings Top, Revenues Rise Y/Y
Brown & Brown, Inc.’s (BRO - Free Report) first-quarter 2023 adjusted earnings of 84 cents per share beat the Zacks Consensus Estimate by 3.7%. The bottom line increased 13.5% year over year.
The quarterly results reflected improved organic growth and higher net investment income, partly offset by higher expenses.
Brown & Brown, Inc. Price, Consensus and EPS Surprise
Brown & Brown, Inc. price-consensus-eps-surprise-chart | Brown & Brown, Inc. Quote
Q1 Details
Total revenues of $1.1 billion beat the Zacks Consensus Estimate by 5.1%. The top line improved 23.6% year over year. The upside can be primarily attributed to commission and fees, which grew 22.5% year over year to $1.1 million.
Organic revenues improved 12.6% to $967.3 million in the quarter under review.
Investment income increased year over year to $7 million from $0.2 million in the year-ago quarter.
Adjusted EBITDAC was $398.2 million, up 23.2% year over year. EBITDAC margin remained flat year over year at 35.7%.
Total expenses increased 28.5% to $821.8 million due to a rise in employee compensation and benefits, other operating expenses, amortization, depreciation and interest expenses.
Financial Update
Brown & Brown exited 2022 with cash and cash equivalents of $563.5 million, down 13.3% from the 2022-end level.
Long-term debt of $3.6 billion as of Mar 31, 2023 slipped 0.3% from 2022 end.
Net cash provided by operating activities in 2022 was $59.8.4 million, down 43.3% year over year.
Dividend Update
The board of directors approved a regular quarterly cash dividend of 11.50 cents per share to be paid out on May 17, 2023, to shareholders of record on May 8, 2023.
Zacks Rank
Brown & Brown currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Insurers
The Travelers Companies (TRV - Free Report) reported first-quarter 2022 core income of $4.11 per share, which beat the Zacks Consensus Estimate of $3.64 and our estimate of $3.41. However, the bottom line decreased 2.6% year over year. Travelers’ total revenues increased 10% from the year-ago quarter to $9.7 billion, primarily driven by higher premiums. The top-line figure however missed the Zacks Consensus Estimate of $9.8 billion.
Net written premiums increased 12% year over year to a record $9.4 billion, driven by strong growth across all three segments. The figure was higher than our estimate of $8.9 billion.
Catastrophe losses totaled $422 million, wider than $36 million pre-tax in the prior-year quarter. Catastrophe losses primarily resulted from severe wind and hail storms in multiple states. Travelers witnessed an underwriting gain of $501 million, down 12.9% year over year. The combined ratio deteriorated 410 bps year over year to 95.4
The Progressive Corporation’s (PGR - Free Report) first-quarter 2023 earnings per share of 65 cents missed the Zacks Consensus Estimate of $1.44 as well as our estimate of $1.50. The bottom line declined 20.7% year over year.
Operating revenues were about $14.2 billion, up 15.8% year over year. This improvement was driven by a 15% increase in premiums, 18.5% higher fees and other revenues, a 7.1% increase in service revenues and 73.2% higher investment income. The top line exceeded the Zacks Consensus Estimate of $14.1 billion and our estimate of $13.1 billion.
Net premiums earned grew 15% to $13.5 billion and beat our estimate of $12.6 billion. The combined ratio — the percentage of premiums paid out as claims and expenses — deteriorated 450 bps from the prior-year quarter’s level to 99.
RLI Corp. (RLI - Free Report) reported first-quarter 2023 operating earnings of $1.63 per share, beating the Zacks Consensus Estimate by 34.7%. The bottom line improved 14% from the prior-year quarter. Operating revenues for the reported quarter were $335 million, up 19.4% year over year, driven by 14.3% higher net premiums earned and 51.5% higher net investment income. The top line however missed the Zacks Consensus Estimate by 2.2%.
Gross premiums written increased 15.6% year over year to $415 million. This uptick can be attributed to the solid performance of the Casualty (up 1%), Property (up 45%) and Surety segments (up 13.6%). Underwriting income of $67.9 million increased 14.1%, primarily due to higher profitability in its Property and Casualty segment. Combined ratio remained flat year over year at 77.9.