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Brown & Brown (BRO) Q3 Earnings In Line, Revenues Up Y/Y

Zacks Equity Research

Brown & Brown, Inc. BRO third-quarter 2019 adjusted earnings of 39 cents per share matched the Zacks Consensus Estimate and grew 2.6% year over year.

The company’s performance was driven by increased investment income, commissions and fees and recent acquisitions.

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

Behind the Headlines

Total revenues of $619 million beat the Zacks Consensus Estimate by 1.7%. Moreover, the top line rose 16.6% year over year on higher commissions and fees plus net investment income.

Commissions and fees grew 16.5% year over year to $617.4 million.

Investment income surged 112.5% year over year to $1.7 million.

Total expenses increased 20.2% to $466.8 million, driven by a rise in employee compensation and benefits, amortization, depreciation as well as other operating expenses and interest expense.

EBITDAC was $195 million, up 9.5% year over year. EBITDAC margin contracted 200 basis points year over year to 31.5%.

Financial Update

Brown & Brown exited the third quarter of 2019 with cash and cash equivalents of $497.5 million, up 13.3% from 2018-end level.

Long-term debt of $1.5 billion as of Sep 30, 2019 was up 3.8% from 2018 end.

Net cash provided by operating activities in the first nine months of 2019 was $447.1 million, up 25.8% year over year.

Dividend Update

The company paid out cash dividend of 8 cents per share in the third quarter, up 6.7% year over year.

Acquisition Update

Brown & Brown closed five 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 third-quarter results so far, Global Life GL, Arthur J. Gallagher AJG and RLI Corp. RLI beat the respective Zacks Consensus Estimate for earnings.

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