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Brown & Brown (BRO) Q2 Earnings Beat, Revenues Improve Y/Y

Zacks Equity Research

Brown & Brown, Inc. BRO second-quarter 2020 adjusted earnings of 34 cents per share beat the Zacks Consensus Estimate by 17.2%. The bottom line also improved 6.3% year over year.

Higher commissions and fees have driven the company’s results, partly offset by increased expenses.

Q2 in Details

Total revenues of $599 million outpaced both the Zacks Consensus Estimate as well as year-ago figure by 4.2%. The upside can primarily be attributed to improved commission and fees, and high organic growth.

Commissions and fees grew 4.4% year over year to $598.2 million. Organic revenues inched up 0.5% to $547.8 million in the quarter under review.

Investment income plunged 80% year over year to $3 million.

EBITDAC was $176.7 million, up 4.8% year over year. EBITDAC margin expanded 20 basis points (bps) year over year to 29.5%.

Total expenses increased 3.9% to $469.4 million courtesy of a rise in employee compensation and benefits, amortization and depreciation.

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

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 second-quarter 2020 with cash and cash equivalents of $623.2 million, up 14.9% from 2019-end level.

Long-term debt of $1.6 billion as of Jun 30, 2020 was up 4.4% from 2019 end.

Net cash provided by operating activities in the first half of 2020 was $416.7 million, up 36.3% year over year.

Dividend Update

On Jul 22, Brown & Brown declared cash dividend of 8.5 cents per share. The dividend will be paid on Aug 12, 2020 to shareholders of record as of Aug 5.

Zacks Rank & Performance of Other Insurers

Brown & Brown carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Among other insurance industry players, which have reported second-quarter earnings so far, the bottom lines of The Progressive Corporation PGR and First American Financial Corporation FAF beat the Zacks Consensus Estimate, while that of The Travelers Companies, Inc. TRV met the same.

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