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Brown & Brown's (BRO) Q4 Earnings & Revenues Top Estimates
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Brown & Brown, Inc.’s (BRO - Free Report) fourth-quarter 2023 adjusted earnings of 58 cents per share beat the Zacks Consensus Estimate by 9.4%. The bottom line increased 16% year over year.
The quarterly results reflected strong organic growth, improved EBITDAC margin and higher net investment income, as well as lower expenses.
Shares gained 1.6% in the after-market trading session, reflecting the outperformance.
Brown & Brown, Inc. Price, Consensus and EPS Surprise
Total revenues of $1.03 billion beat the Zacks Consensus Estimate by 4.6%. The top line improved 13.8% year over year. The upside can be primarily attributed to commission and fees, which grew 12.4% year over year to $1 billion. Our estimate for commission and fees was $943.6 million.
Organic revenues improved 7.7% to $922.9 million in the quarter under review.
Investment income increased year over year to $18.5 million from $4.7 million in the year-ago quarter. The Zacks Consensus Estimate for the metric was pegged at $16.7 million and our estimate was $17.6 million.
Adjusted EBITDAC was $317.7 million, up 11.7% year over year. EBITDAC margin however contracted 40 basis points (bps) year over year to 31%. Our estimate for adjusted EBITDAC was $291.4 million.
Total expenses decreased 5.1% to $671.1 million. Our estimate was $764.9 million.
Financial Update
Brown & Brown exited 2023 with cash and cash equivalents of $755.7 million, up 1.1% from the 2022-end level.
Long-term debt was $3.1 billion as of Dec 31, 2023, up 0.9% from 2022 end.
Net cash provided by operating activities in 2023 was $1 billion, up 14.5% year over year.
Full-Year Highlights
Adjusted earnings were $2.81 per share, up 23.2% from 2022.
Total revenues of $4.3 billion improved 19.1% year over year. Commissions and fees increased 17.9%. Organic revenue growth was 10.2%.
Adjusted EBITDAC was $1.4 billion, in line with our estimate and up 23.1% from the 2022 level. Adjusted EBITDAC margin expanded 120 bps to 33.9%. Our estimate was 33.8%.
Business Update
Brown & Brown announced a new alignment of its businesses in conjunction with the divestiture of certain businesses within the Services segment in the fourth quarter of 2023. The insurance broker will now report results in three segments beginning 2024 — Retail, Programs and Wholesale Brokerage.
The Travelers Companies (TRV - Free Report) reported fourth-quarter 2023 core income of $7.01 per share, which beat the Zacks Consensus Estimate of $5.04. The bottom line more than doubled year over year, driven by higher underlying underwriting gain, lower catastrophe losses and higher net investment income. Travelers’ total revenues increased 13.5% from the year-ago quarter to $10.9 billion, primarily driven by higher premiums. The top-line figure beat the Zacks Consensus Estimate by 0.2%.
Net written premiums increased 13% year over year to about $10 billion, driven by strong growth across all three segments. The figure was higher than our estimate of $9.7 billion. Travelers witnessed an underwriting gain of $1.4 billion, up more than three-fold year over year, driven by higher business volumes. The combined ratio improved 870 bps year over year to 85.8, driven by a lower underlying combined ratio and lower catastrophe losses.
Upcoming Releases
The Progressive Corporation (PGR - Free Report) will report fourth-quarter 2023 results on Jan 24. The Zacks Consensus Estimate for the fourth quarter is pegged at $2.38, suggesting an increase of 58.7% from the year-ago quarter’s reported figure.
PGR’s earnings beat estimates in two of the last four quarters but missed in the other two.
RLI Corporation (RLI - Free Report) will report fourth-quarter 2023 results on Jan 24. The Zacks Consensus Estimate for the fourth quarter is pegged at $1.44, suggesting a decrease of 5.9% from the year-ago quarter’s reported figure.
RLI’s earnings beat estimates in three of the last four quarters while missing in the other one.
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Brown & Brown's (BRO) Q4 Earnings & Revenues Top Estimates
Brown & Brown, Inc.’s (BRO - Free Report) fourth-quarter 2023 adjusted earnings of 58 cents per share beat the Zacks Consensus Estimate by 9.4%. The bottom line increased 16% year over year.
The quarterly results reflected strong organic growth, improved EBITDAC margin and higher net investment income, as well as lower expenses.
Shares gained 1.6% in the after-market trading session, reflecting the outperformance.
Brown & Brown, Inc. Price, Consensus and EPS Surprise
Brown & Brown, Inc. price-consensus-eps-surprise-chart | Brown & Brown, Inc. Quote
Q4 Details
Total revenues of $1.03 billion beat the Zacks Consensus Estimate by 4.6%. The top line improved 13.8% year over year. The upside can be primarily attributed to commission and fees, which grew 12.4% year over year to $1 billion. Our estimate for commission and fees was $943.6 million.
Organic revenues improved 7.7% to $922.9 million in the quarter under review.
Investment income increased year over year to $18.5 million from $4.7 million in the year-ago quarter. The Zacks Consensus Estimate for the metric was pegged at $16.7 million and our estimate was $17.6 million.
Adjusted EBITDAC was $317.7 million, up 11.7% year over year. EBITDAC margin however contracted 40 basis points (bps) year over year to 31%. Our estimate for adjusted EBITDAC was $291.4 million.
Total expenses decreased 5.1% to $671.1 million. Our estimate was $764.9 million.
Financial Update
Brown & Brown exited 2023 with cash and cash equivalents of $755.7 million, up 1.1% from the 2022-end level.
Long-term debt was $3.1 billion as of Dec 31, 2023, up 0.9% from 2022 end.
Net cash provided by operating activities in 2023 was $1 billion, up 14.5% year over year.
Full-Year Highlights
Adjusted earnings were $2.81 per share, up 23.2% from 2022.
Total revenues of $4.3 billion improved 19.1% year over year. Commissions and fees increased 17.9%. Organic revenue growth was 10.2%.
Adjusted EBITDAC was $1.4 billion, in line with our estimate and up 23.1% from the 2022 level. Adjusted EBITDAC margin expanded 120 bps to 33.9%. Our estimate was 33.8%.
Business Update
Brown & Brown announced a new alignment of its businesses in conjunction with the divestiture of certain businesses within the Services segment in the fourth quarter of 2023. The insurance broker will now report results in three segments beginning 2024 — Retail, Programs and Wholesale Brokerage.
Zacks Rank
Brown & Brown currently carries a Zacks Rank #2 (Buy). 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) reported fourth-quarter 2023 core income of $7.01 per share, which beat the Zacks Consensus Estimate of $5.04. The bottom line more than doubled year over year, driven by higher underlying underwriting gain, lower catastrophe losses and higher net investment income. Travelers’ total revenues increased 13.5% from the year-ago quarter to $10.9 billion, primarily driven by higher premiums. The top-line figure beat the Zacks Consensus Estimate by 0.2%.
Net written premiums increased 13% year over year to about $10 billion, driven by strong growth across all three segments. The figure was higher than our estimate of $9.7 billion. Travelers witnessed an underwriting gain of $1.4 billion, up more than three-fold year over year, driven by higher business volumes. The combined ratio improved 870 bps year over year to 85.8, driven by a lower underlying combined ratio and lower catastrophe losses.
Upcoming Releases
The Progressive Corporation (PGR - Free Report) will report fourth-quarter 2023 results on Jan 24. The Zacks Consensus Estimate for the fourth quarter is pegged at $2.38, suggesting an increase of 58.7% from the year-ago quarter’s reported figure.
PGR’s earnings beat estimates in two of the last four quarters but missed in the other two.
RLI Corporation (RLI - Free Report) will report fourth-quarter 2023 results on Jan 24. The Zacks Consensus Estimate for the fourth quarter is pegged at $1.44, suggesting a decrease of 5.9% from the year-ago quarter’s reported figure.
RLI’s earnings beat estimates in three of the last four quarters while missing in the other one.