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Arthur J. Gallagher (AJG) Q1 Earnings and Revenues Beat
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Arthur J. Gallagher & Co. (AJG - Free Report) reported first-quarter 2019 adjusted net earnings of $1.63 cents per share, which beat the Zacks Consensus Estimate by 1.2%. Moreover, the bottom line increased 1.5% on a year-over-year basis.
The company’s performance was driven by solid organic growth, sturdy performance across all segments and strong margin expansion.
Operational Update
Total revenues were nearly $2 billion, up 8.3% year over year. This upside was driven by higher total revenues in Brokerage and Risk Management. Also, the top line surpassed the Zacks Consensus Estimate of $1.9 billion.
Arthur J. Gallagher’s total expense rose 4.6% year over year to $1.7 billion in the reported quarter. Expenses escalated primarily due to higher compensation costs, operating costs, interest expenses, higher depreciation as well as amortization expenses.
Adjusted earnings before interest, tax, depreciation and amortization and change in estimated acquisition earnout payables (EBITDAC) grew 15.5%.
Arthur J. Gallagher & Co. Price, Consensus and EPS Surprise
Of the insurance industry players that have reported first-quarter earnings so far, The Travelers Companies, Inc. (TRV - Free Report) , The Progressive Corporation (PGR - Free Report) and RLI Corp. (RLI - Free Report) beat the respective Zacks Consensus Estimate for earnings.
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-holds for the year?
Who wouldn't? Our annual Top 10s have beaten the market with amazing regularity. In 2018, while the market dropped -5.2%, the portfolio scored well into double-digits overall with individual stocks rising as high as +61.5%. And from 2012-2017, while the market boomed +126.3, Zacks' Top 10s reached an even more sensational +181.9%.
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Arthur J. Gallagher (AJG) Q1 Earnings and Revenues Beat
Arthur J. Gallagher & Co. (AJG - Free Report) reported first-quarter 2019 adjusted net earnings of $1.63 cents per share, which beat the Zacks Consensus Estimate by 1.2%. Moreover, the bottom line increased 1.5% on a year-over-year basis.
The company’s performance was driven by solid organic growth, sturdy performance across all segments and strong margin expansion.
Operational Update
Total revenues were nearly $2 billion, up 8.3% year over year. This upside was driven by higher total revenues in Brokerage and Risk Management. Also, the top line surpassed the Zacks Consensus Estimate of $1.9 billion.
Arthur J. Gallagher’s total expense rose 4.6% year over year to $1.7 billion in the reported quarter. Expenses escalated primarily due to higher compensation costs, operating costs, interest expenses, higher depreciation as well as amortization expenses.
Adjusted earnings before interest, tax, depreciation and amortization and change in estimated acquisition earnout payables (EBITDAC) grew 15.5%.
Arthur J. Gallagher & Co. Price, Consensus and EPS Surprise
Arthur J. Gallagher & Co. Price, Consensus and EPS Surprise | Arthur J. Gallagher & Co. Quote
Segment Results
Brokerage: Adjusted revenues of $1.3 billion increased 13% year over year.
Expenses increased 10.6% to $969.5 million.
Adjusted EBITDAC climbed 15% to $471.9 million while margin expanded 61 bps.
Risk Management: Adjusted revenues were up 4.1% year over year to $203.3 million, mainly owing to higher fees.
Expenses increased 2.9% to $41.4 million.
Adjusted EBITDAC increased 10% year over year to $34.5 million while margin expanded 61 bps.
Corporate: EBITDAC was negative $65.4 million, wider than $59.9 million incurred in the year- ago quarter.
Financial Update
As of Mar 31, 2019, total assets were $16.3 billion, up 14% from 2018.
Cash and cash equivalents at quarter end declined 31% from 2018 level to $1.5 billion.
Shareholders’ equity increased 8.5% from the level as of Dec 31, 2018 to $4.9 billion as of Mar 31, 2019.
Acquisition Update
In the quarter, the company closed 11 acquisitions with estimated annualized revenues of about $71.2 million.
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
Of the insurance industry players that have reported first-quarter earnings so far, The Travelers Companies, Inc. (TRV - Free Report) , The Progressive Corporation (PGR - Free Report) and RLI Corp. (RLI - Free Report) beat the respective Zacks Consensus Estimate for earnings.
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-holds for the year?
Who wouldn't? Our annual Top 10s have beaten the market with amazing regularity. In 2018, while the market dropped -5.2%, the portfolio scored well into double-digits overall with individual stocks rising as high as +61.5%. And from 2012-2017, while the market boomed +126.3, Zacks' Top 10s reached an even more sensational +181.9%.
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