Arthur J. Gallagher (AJG) Q3 Earnings: How Key Metrics Compare to Wall Street Estimates
Arthur J. Gallagher (AJG) reported $2.45 billion in revenue for the quarter ended September 2023, representing a year-over-year increase of 22%. EPS of $2.00 for the same period compares to $1.72 a year ago.
The reported revenue compares to the Zacks Consensus Estimate of $2.41 billion, representing a surprise of +1.75%. The company delivered an EPS surprise of +3.09%, with the consensus EPS estimate being $1.94.
While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expectations to determine their next course of action, some key metrics always provide a better insight into a company's underlying performance.
Since these metrics play a crucial role in driving the top- and bottom-line numbers, comparing them with the year-ago numbers and what analysts estimated about them helps investors better project a stock's price performance.
Here is how Arthur J. Gallagher performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts:
Brokerage - Compensation expense ratio: 56.1% versus the three-analyst average estimate of 56.5%.
Risk Management Segment - Operating expense ratio: 19.6% versus the three-analyst average estimate of 20.1%.
Risk Management Segment - Compensation expense ratio: 60.2% compared to the 55.8% average estimate based on three analysts.
Brokerage - Operating expense ratio: 15.1% versus 14.2% estimated by three analysts on average.
Revenue- Commissions: $1.38 billion compared to the $1.43 billion average estimate based on five analysts. The reported number represents a change of +16.4% year over year.
Revenue- Fees: $846.10 million compared to the $781.28 million average estimate based on five analysts. The reported number represents a change of +26% year over year.
Revenue Risk Management Segment- Revenues before reimbursements: $331 million versus $318.92 million estimated by four analysts on average. Compared to the year-ago quarter, this number represents a +20.2% change.
Revenue Brokerage Segment- Investment income and net gains on divestitures: $93.20 million versus the three-analyst average estimate of $52.14 million. The reported number represents a year-over-year change of +157.5%.
Revenue Risk Management Segment- Fees: $323.10 million compared to the $314.69 million average estimate based on three analysts. The reported number represents a change of +17.4% year over year.
Revenue Risk Management Segment- Reimbursements: $38.40 million versus $33.73 million estimated by three analysts on average. Compared to the year-ago quarter, this number represents a +20% change.
Revenue Brokerage Segment- Contingent revenues: $53.90 million versus the three-analyst average estimate of $61 million. The reported number represents a year-over-year change of +2.9%.
Revenue Brokerage Segment- Supplemental revenues: $70.80 million compared to the $70.79 million average estimate based on three analysts. The reported number represents a change of +9.4% year over year.
View all Key Company Metrics for Arthur J. Gallagher here>>>
Shares of Arthur J. Gallagher have returned +0.3% over the past month versus the Zacks S&P 500 composite's -3.4% change. The stock currently has a Zacks Rank #3 (Hold), indicating that it could perform in line with the broader market in the near term.
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