Arthur J Gallagher & Co.
) reported fourth-quarter 2013 operating net earnings of 48 cents
a share that missed the Zacks Consensus Estimate by a penny.
However, the result increased from the prior-year quarter number
Including the effect of integration costs associated with
Bollinger and Giles' acquisitions, Arthur J Gallagher & Co.
reported net earnings of 45 cents a share during the reported
quarter that surged 66.7%.
The year-over-year improvement was driven by top-line growth at
Arthur J Gallagher & Co.
Total revenue of Arthur J Gallagher & Co. amounted to $890.2
million, significantly surpassing the Zacks Consensus Estimate by
16.1%. Results also jumped 32.2% year over year. Top-line growth
primarily resulted from better results across its Risk Management
and Brokerage segments.
Total commissions and fees earned went up 20.5% year over year to
$556.3 million in the quarter.
Arthur J Gallagher & Co.'s total expense also increased 33.9%
year over year to $840.2 million during the quarter. The rise in
expenses was mainly attributable to increased compensation cost,
operating expenses and also significantly higher cost of revenues
from clean coal activities.
This segment of Arthur J Gallagher & Co. reported total
revenue of $592.7 million that increased 21.2% year over year.
This was driven by a 5.8% improvement in base organic commissions
and fees during the reported quarter.
Total expense also increased significantly by 18.8% year over
Additionally, the fourth quarter saw the segment completing 13
acquisitions in this segment with annualized revenues of $193.5
Risk Management Segment
Total revenue in this segment amounted to $151.5 million
increasing 4.6% year over year. Also, organic fees rose 9.3% year
over year during the same time period.
Total expense during the fourth quarter moved up 4.8% to $137.6
Moreover, this segment completed a claim portfolio transfer
during the reported quarter from an insurance company that is
expected to generate $12 million to $15 million of additional
This segment reported total revenues of $146 million that
increased nearly four times year over year. Growth was primarily
driven by a surge in revenues from consolidated clean coal
Total expense also surged to $187.7 million during the quarter.
Full-Year 2013 Highlights
Arthur J Gallagher & Co. reported net earnings of $2.06 per
share for full year 2013 that increased 29.6% from the 2012
Total revenue grossed $3.18 billion, increasing 26.2% over 2012.
Total expense stood at $2.90 billion, escalating 27.7% from the
Total assets at Arthur J Gallagher & Co. as of end-2013 stood
at $6.86 billion increasing 28.2% from the 2012-end level.
Cash and cash equivalents declined marginally by 1.3% over 2012
level and stood at $298.1 million at the end of 2013.
Arthur J Gallagher & Co. presently carries a Zacks Rank #3
(Hold). Other better-ranked insurance stocks worth reckoning
Lincoln National Corp.
Marsh & Mclennan Companies, Inc.
China Life Insurance Co. Ltd.
). All these stocks carry a Zacks Rank #2 (Buy).
GALLAGHER ARTHU (AJG): Free Stock Analysis
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MARSH &MCLENNAN (MMC): Free Stock Analysis
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