Upcoming AWS Coverage on Arthur J. Gallagher

LONDON, UK / ACCESSWIRE / April 19, 2017 / Active Wall St. announces its post-earnings coverage on Brown & Brown, Inc. (NYSE: BRO). The Company disclosed its unaudited financial results for the first quarter of 2017 on April 17, 2017. The insurance Company surpassed top- and bottom-line expectations. Register with us now for your free membership at: http://www.activewallst.com/register/.

One of Brown & Brown's competitors within the Insurance Brokers space, Arthur J. Gallagher & Co. (NYSE: AJG), is estimated to report earnings on April 27, 2017. AWS will be initiating a research report on Arthur J. Gallagher following the release of its next earnings results.

Today, AWS is promoting its earnings coverage on BRO; touching on AJG. Get our free coverage by signing up to: http://www.activewallst.com/register/.

Earnings Reviewed

For the three months ended March 31, 2017, Brown & Brown announced GAAP revenues of $465.1 million, increasing $40.9 million, or 9.6%, compared to GAAP revenues of $424.2 million, with commissions and fees increasing by 5.3% and organic revenue increasing by 3.5%.

For Q1 FY17, Brown & Brown's net income was $70.1 million, up 12.9%, and diluted earnings per share were $0.49, up 11.4%, compared to diluted earnings per share of $0.44 in the year ago quarter. The Company stated that, excluding the beneficial impact of the legal settlement with AssuredPartners, Inc. and the associated legal costs, the change in acquisition earn-out payables and the impact of adopting FASB Accounting Standards Update 2016-09 for stock based compensation, the Company's adjusted revenues increased by $20.9 million, or 4.9%, and adjusted diluted earnings per share decreased by 4.4% to $0.43. The Company's results exceeded Wall Street's expectations for revenue of $443.4 million and earnings of $0.42 per share.

Brown & Brown's income before income taxes for Q1 FY17 was $111.0 million, an increase of $8.4 million, or 8.2% on a y-o-y basis, and the income before income taxes margin decreased from 24.2% to 23.9% compared to the year ago same period.

For Q1 FY17, Brown & Brown's EBITDAC was $152.4 million, an increase of $13.8 million or 10.0%, compared to EBITDAC of $138.6 million in Q1 FY16. The Company's EBITDAC margin increased from 32.7% in Q1 FY16 to 32.8% in Q1 FY17. Excluding the effect of the Legal Settlement net of associated legal costs, the Company's adjusted EBITDAC decreased from 32.7% in the year ago comparable period to 30.0% in the reported quarter.

Segment Results

For Q1 FY17, Brown & Brown's national programs division delivered revenues consistent with the prior year. The Company expects that there would be downward pressure in H2 FY17 on organic revenue growth as it had storm claim revenues in H2 FY17 and carrier changes.

For the reported quarter, Brown & Brown's wholesale division delivered total revenue growth of 22.1%, driven by acquisitions and organic revenue growth of 7.4%. Income before income taxes had decreased by 380 basis points to 23.5%. The segment's EBITDAC margins were 31.3% for the quarter versus 33.3% in the prior year.

Brown & Brown's services division delivered total revenue growth of 7.4% and organic growth of 4.9%. For the reported quarter, the Company's EBITDAC margin increased by 60 basis points, primarily due to higher claim volumes, managing the Company's costs and the acquisition of a higher margin business in Q1 FY16. The incremental increase in income before income taxes as a percentage of revenue was driven by lower inter-company interest expense.

Dividend Declaration

On April 17, 2017, Brown & Brown's Board of Directors declared a regular quarterly cash dividend of $0.1350 per share, to be paid on May 17, 2017, to shareholders of record on May 08, 2017.

Balance Sheet

Brown & Brown exited Q1 FY17 with cash and cash equivalents of $546.7 million, up 6% from year-end 2016. As of March 31, 2017, the Company's long-term debt was $1.01 billion, down 1.3% from $1.018 billion at the end of 2016.

Stock Performance

At the closing bell, on Tuesday, April 18, 2017, Brown & Brown's share price finished the trading session at $42.33, slightly up 0.95%. A total volume of 1.07 million shares exchanged hands, which was higher than the 3 months average volume of 646.31 thousand shares. The stock has advanced 13.84% and 19.22% in the last six months and past twelve months, respectively. The stock is trading at a PE ratio of 23.26 and has a dividend yield of 1.28%.

Active Wall Street:

Active Wall Street (AWS) produces regular sponsored and non-sponsored reports, articles, stock market blogs, and popular investment newsletters covering equities listed on NYSE and NASDAQ and micro-cap stocks. AWS has two distinct and independent departments. One department produces non-sponsored analyst certified content generally in the form of press releases, articles and reports covering equities listed on NYSE and NASDAQ and the other produces sponsored content (in most cases not reviewed by a registered analyst), which typically consists of compensated investment newsletters, articles and reports covering listed stocks and micro-caps. Such sponsored content is outside the scope of procedures detailed below.

AWS has not been compensated; directly or indirectly; for producing or publishing this document.

PRESS RELEASE PROCEDURES:

The non-sponsored content contained herein has been prepared by a writer (the "Author") and is fact checked and reviewed by a third party research service company (the "Reviewer") represented by a credentialed financial analyst [for further information on analyst credentials, please email info@activewallst.com. Rohit Tuli, a CFA® charterholder (the "Sponsor"), provides necessary guidance in preparing the document templates. The Reviewer has reviewed and revised the content, as necessary, based on publicly available information which is believed to be reliable. Content is researched, written and reviewed on a reasonable-effort basis. The Reviewer has not performed any independent investigations or forensic audits to validate the information herein. The Reviewer has only independently reviewed the information provided by the Author according to the procedures outlined by AWS. AWS is not entitled to veto or interfere in the application of such procedures by the third-party research service company to the articles, documents or reports, as the case may be. Unless otherwise noted, any content outside of this document has no association with the Author or the Reviewer in any way.

NO WARRANTY

AWS, the Author, and the Reviewer are not responsible for any error which may be occasioned at the time of printing of this document or any error, mistake or shortcoming. No liability is accepted whatsoever for any direct, indirect or consequential loss arising from the use of this document. AWS, the Author, and the Reviewer expressly disclaim any fiduciary responsibility or liability for any consequences, financial or otherwise arising from any reliance placed on the information in this document. Additionally, AWS, the Author, and the Reviewer do not (1) guarantee the accuracy, timeliness, completeness or correct sequencing of the information, or (2) warrant any results from use of the information. The included information is subject to change without notice.

NOT AN OFFERING

This document is not intended as an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed, and is to be used for informational purposes only. Please read all associated disclosures and disclaimers in full before investing. Neither AWS nor any party affiliated with us is a registered investment adviser or broker-dealer with any agency or in any jurisdiction whatsoever. To download our report(s), read our disclosures, or for more information, visit http://www.activewallst.com/disclaimer/.

CONTACT

For any questions, inquiries, or comments reach out to us directly. If you're a company we are covering and wish to no longer feature on our coverage list contact us via email and/or phone between 09:30 EDT to 16:00 EDT from Monday to Friday at:

Email: info@activewallst.com

Phone number: 1-858-257-3144

Office Address: 3rd floor, 207 Regent Street, London, W1B 3HH, United Kingdom

CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.

SOURCE: Active Wall Street