Brown & Brown Inc. (BRO) reported its operating net income of 40 cents per share for the third quarter of 2013, which missed the Zacks Consensus Estimate by a penny. However, the results improved 14.7% from 34 cents per share earned in the year-ago quarter.
After adjusting for acquisition-related expenses of 1 cent per share, net income came in at 39 cents per share in the reported quarter, comparing favorably with net income of 34 cents in the prior-year quarter
The improvement was primarily driven by solid performance across four business divisions.
Behind the Headlines
Total revenues of Brown & Brown Inc. amounted to $359.3 million in the third quarter of 2013, surpassing the Zacks Consensus Estimate of $349 million. The results also improved 18.3% year over year driven by higher commissions and fees.
Among the four business divisions of the company, Wholesale Brokerage and National Programs exhibited higher organic revenue growth rates of 15.8% and 14% respectively, whereas organic growth rates of Services and Retail Divisions were 4.6% and 2.5% respectively, in the third quarter of 2013.
Total expenses increased 18.8% year over year to $263.9 million.
The magnitude of increase in expenses was higher than that of revenues, inducing a 30 basis points reduction in pre-tax margin in the reported quarter.
Brown & Brown Inc. exited the reported quarter with cash and cash equivalents of approximately $171 million compared with $219.8 million reported at the end of year ago quarter.
Long term debt of the company stood at $380 million at the end of third quarter of 2013 improving from $450 million reported at the end of third quarter of previous year.
Brown & Brown Inc. paid a quarterly cash dividend of 9 cents per share on Aug 14, 2013 to the shareholders of record as of Aug 7, 2013.
Brown & Brown Inc. presently carries a Zacks Rank #3 (Hold). Insurance broker eHealth, Inc. (EHTH), carrying a Zacks Rank #2 (Buy), is scheduled to release its third-quarter results on Oct 24. Among others in the insurance space, property & casualty insurers RLI Corp. (RLI) and Fidelity National Financial Inc. (FNF) is scheduled to release its third-quarter earnings results on Oct 16 and Oct 30 respectively. Both these stocks carry a Zacks Rank #1 (Strong Buy).