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Arthur J. Gallagher (AJG) Q2 Earnings Beat, Revenues Miss
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Arthur J. Gallagher & Co. (AJG - Free Report) reported second-quarter 2019 adjusted net earnings of 65 cents per share, which beat the Zacks Consensus Estimate by 6.6%. Moreover, the bottom line increased 4.8% 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 $1.6 billion, flat year over year. However, the top line missed the Zacks Consensus Estimate by 8.3%.
Arthur J. Gallagher’s total expense decreased 1.3% year over year to $1.6 million in the reported quarter. Lower cost of revenues from clean coal activities attributed to the downside.
Adjusted earnings before interest, tax, depreciation and amortization and change in estimated acquisition earnout payables (EBITDAC) grew 14%.
Arthur J. Gallagher & Co. Price, Consensus and EPS Surprise
Of the insurance industry players that have reported second-quarter results so far, Brown and Brown Inc. (BRO - Free Report) , The Progressive Corporation (PGR - Free Report) and RLI Corp. (RLI - Free Report) beat the respective Zacks Consensus Estimate for earnings.
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A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 7 stocks to watch. The report is only available for a limited time.
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Arthur J. Gallagher (AJG) Q2 Earnings Beat, Revenues Miss
Arthur J. Gallagher & Co. (AJG - Free Report) reported second-quarter 2019 adjusted net earnings of 65 cents per share, which beat the Zacks Consensus Estimate by 6.6%. Moreover, the bottom line increased 4.8% 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 $1.6 billion, flat year over year. However, the top line missed the Zacks Consensus Estimate by 8.3%.
Arthur J. Gallagher’s total expense decreased 1.3% year over year to $1.6 million in the reported quarter. Lower cost of revenues from clean coal activities attributed to the downside.
Adjusted earnings before interest, tax, depreciation and amortization and change in estimated acquisition earnout payables (EBITDAC) grew 14%.
Arthur J. Gallagher & Co. Price, Consensus and EPS Surprise
Arthur J. Gallagher & Co. price-consensus-eps-surprise-chart | Arthur J. Gallagher & Co. Quote
Segment Results
Brokerage: Adjusted revenues of $1.1 billion increased 15% year over year on higher fees and commission.
Expenses increased 14.4% to $948.9 million.
Adjusted EBITDAC climbed 18% to $298 million while margin expanded 48 basis points (bps).
Risk Management: Adjusted revenues were up 5% year over year to $290.1 million, mainly owing to higher fees.
Expenses increased 3.6% to $221.1 million.
Adjusted EBITDAC increased 4% year over year to $36.6 million while margin contracted 12 bps.
Corporate: EBITDAC was negative $45.9 million compared with $50.1 million in the year- ago quarter.
Financial Update
As of Jun 30, 2019, total assets were $19.2 billion, up 17.8% from 2018.
Cash and cash equivalents at quarter end increased 13.8% from 2018 level to $2.5 billion.
Shareholders’ equity increased 8.3% from the level as of Dec 31, 2018 to $4.9 billion as of Jun 30, 2019.
Acquisition Update
In the quarter, the company closed 13 acquisitions with estimated annualized revenues of about $194.5 million.
Zacks Rank
Currently, Arthur J. Gallagher 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
Of the insurance industry players that have reported second-quarter results so far, Brown and Brown Inc. (BRO - Free Report) , The Progressive Corporation (PGR - Free Report) and RLI Corp. (RLI - Free Report) beat the respective Zacks Consensus Estimate for earnings.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 7 stocks to watch. The report is only available for a limited time.
See 7 breakthrough stocks now>>