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Brown & Brown (BRO) Q4 Earnings & Revenues Top, Rise Y/Y

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Zacks Equity Research
·3 min read
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Brown & Brown BRO reported adjusted fourth-quarter 2020 earnings of 32 cents per share, which came ahead of the Zacks Consensus Estimate as well as the year-ago figure by 14.3%.

The results reflect improved organic growth and margin expansion.

Behind the Headlines    

Adjusted revenues of $642 million beat the Zacks Consensus Estimate by 3.6%. Moreover, the top line rose 10.9% year over year on higher commissions and fees. Organic revenues increased 4.7% in the reported quarter.

Commissions and fees grew 10.9% year over year to $581.4 million.

Investment income however plunged 33.3% year over year to $1 million.

Total expenses increased 7.2% to $511.2 million due to a rise in employee compensation and amortization and depreciation as well as interest expense.

EBITDAC was $173.9 million, up 11.3% year over year. EBITDAC margin expanded 10 basis points (bps) to 27.1%.

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

Full-Year Update

Full-year 2020 adjusted income of $1.67 per share beat the Zacks Consensus Estimate of $1.64. The bottom line increased 19.3% year over year.

Total revenues increased 9.2% from the year-ago quarter to $2.61 billion and beat the Zacks Consensus Estimate of $2.59 billion.

EBITDAC was $813.4 million, up 13.5% from 2019 with margin expanding 110 bps to 31.1%.

Financial Update

Brown & Brown exited 2020 with cash and cash equivalents of $1.3 billion, up about 32.1% from 2019-end level.

Long-term debt of $2 billion as of Dec 31, 2020 was up 35% from 2019 end.

Net cash provided by operating activities in 2020 was $721.6 million, up 6.4% year over year.

Dividend Update

The company paid out cash dividend of 9.3 cents per share in the fourth quarter.

Zacks Rank

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

Performance of Another Insurer

The Travelers Companies’ TRV bottom line beat the Zacks Consensus Estimate in fourth quarter of 2020.

Upcoming Releases

The Progressive Corporation PGR is set to release fourth-quarter 2020 earnings on Jan 27. The Zacks Consensus Estimate for the same stands at $1.68 per share.

RLI Corp RLI is set to release fourth-quarter 2020 earnings on Jan 27. The Zacks Consensus Estimate for the same stands at 56 cents per share.

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