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Brown & Brown (BRO) Q1 Earnings Top Estimates, Revenues Up Y/Y

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Brown & Brown, Inc. (BRO - Free Report) first-quarter 2020 adjusted earnings of 51 cents per share beat the Zacks Consensus Estimate by 10.9%. The bottom line also improved 24.4% year over year.

The company’s results were driven by higher commissions and fees, and improved operational excellence.

Q1 in Details

Total revenues of $699 million outpaced the Zacks Consensus Estimate by 2.4%. Moreover, the top line improved 12.8% year over year. The upside can primarily be attributed to increased commission and fees, and high organic growth.

Commissions and fees grew 12.8% year over year to $696.5 million. Organic revenues improved 5.6% to $627.4 million in the quarter under review.

Investment income surged 9.1% year over year to $1.2 million.

EBITDAC was $242 million, up 22.8% year over year. EBITDAC margin expanded 280 basis points year over year to 34.6%.

Total expenses increased 4.8% to $493.2 million courtesy of a rise in employee compensation and benefits, and amortization, interest and other operating expenses.

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

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

Brown & Brown, Inc. price-consensus-eps-surprise-chart | Brown & Brown, Inc. Quote

Financial Update

Brown & Brown exited first-quarter 2020 with cash and cash equivalents of $385.8 million, down 28.8% from 2019-end level.

Long-term debt of $1.5 billion as of Mar 31, 2020 was down 1.1% from 2019 end.

Net cash provided by operating activities in the first quarter was $33.8 million, up 525.9% year over year.

Dividend Update

Concurrent with the earnings release, Brown & Brown paid out cash dividend of 8.5 cents per share in the first quarter. The dividend will be paid on May 20, 2020 to shareholders of record as of May 11.

Acquisition Update

Brown & Brown closed five buyouts in the reported quarter.

Zacks Rank

Brown & Brown carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Players

Among other insurance industry players, which have reported first-quarter earnings so far, the bottom lines of Chubb Limited (CB - Free Report) , eHealth, Inc. (EHTH - Free Report) and First American Financial Corporation (FAF - Free Report) have outpaced the Zacks Consensus Estimate.

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