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Brown & Brown (BRO) Q4 Earnings & Revenues Beat Estimates

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Brown & Brown, Inc. BRO fourth-quarter 2019 adjusted earnings of 28 cents per share beat the Zacks Consensus Estimate by 3.7% and grew 7.7% year over year.

Earnings were driven by higher commissions and fees, increased investment income and recent acquisitions.

Brown & Brown, Inc. Price, Consensus and EPS Surprise

Behind the Headlines

Total revenues of $579 million beat the Zacks Consensus Estimate by 1.9%. Moreover, the top line rose 13.7% year over year on higher commissions and fees plus net investment income.

Commissions and fees grew 13.6% year over year to $577 million.
Investment income surged 150% year over year to $1.5 million.

Total expenses increased 16.9% to $477 million due to a rise in employee compensation and benefits, amortization, change in estimated acquisition earn-out payables as well as other operating expenses and interest expense.

EBITDAC was $156.2 million, up 9.2% year over year. EBITDAC margin contracted 110 basis points year over year to 27%.

Financial Update

Brown & Brown exited the fourth quarter of 2019 with cash and cash equivalents of $542.2 million, up 23.5% from 2018-end level.

Long-term debt of $1.5 billion as of Dec 31, 2019 was up 3% from 2018 end.

Net cash provided by operating activities in the year 2019 was $678.2 million, up 19.5% year over year.

Dividend Update

The company paid out cash dividend of 8.5 cents per share in the fourth quarter, up 6.3% year over year.

Acquisition Update

Brown & Brown closed four acquisitions in the reported quarter.

Zacks Rank

Brown & Brown currently has a Zacks Rank #2 (Buy).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other Insurance Releases

Of the insurance industry players that have reported fourth-quarter results so far, RLI Corp. RLI and The Travelers Companies, Inc. (TRV - Free Report) beat the respective Zacks Consensus Estimate for earnings.

Upcoming Releases

Principal Financial Group, Inc. PFG will release fourth-quarter 2019 earnings on Jan 28 after market close. The Zacks Consensus Estimate for earnings is pegged at $1.42 per share.

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