Brown & Brown Misses Q3 Earnings - Analyst Blog


Brown & Brown Inc. ( BRO ) reported its operating net income of 40 cents per share for the third quarter of 2013, which missed the Zacks Consensus Estimate by a penny. However, the results improved 14.7% from 34 cents per share earned in the year-ago quarter.

After adjusting for acquisition-related expenses of 1 cent per share, net income came in at 39 cents per share in the reported quarter, comparing favorably with net income of 34 cents in the prior-year quarter

The improvement was primarily driven by solid performance across four business divisions.

Behind the Headlines

Total revenues of Brown & Brown Inc. amounted to $359.3 million in the third quarter of 2013, surpassing the Zacks Consensus Estimate of $349 million. The results also improved 18.3% year over year driven by higher commissions and fees.

Among the four business divisions of the company, Wholesale Brokerage and National Programs exhibited higher organic revenue growth rates of 15.8% and 14% respectively, whereas organic growth rates of Services and Retail Divisions were 4.6% and 2.5% respectively, in the third quarter of 2013.

Total expenses increased 18.8% year over year to $263.9 million.

The magnitude of increase in expenses was higher than that of revenues, inducing a 30 basis points reduction in pre-tax margin in the reported quarter.

Financial Update

Brown & Brown Inc. exited the reported quarter with cash and cash equivalents of approximately $171 million compared with $219.8 million reported at the end of year ago quarter.

Long term debt of the company stood at $380 million at the end of third quarter of 2013 improving from $450 million reported at the end of third quarter of previous year.

Dividend Update

Brown & Brown Inc. paid a quarterly cash dividend of 9 cents per share on Aug 14, 2013 to the shareholders of record as of Aug 7, 2013.

Zacks Rank

Brown & Brown Inc. presently carries a Zacks Rank #3 (Hold). Insurance broker eHealth, Inc. ( EHTH ), carrying a Zacks Rank #2 (Buy), is scheduled to release its third-quarter results on Oct 24. Among others in the insurance space, property & casualty insurers RLI Corp. ( RLI ) and Fidelity National Financial Inc. ( FNF ) is scheduled to release its third-quarter earnings results on Oct 16 and Oct 30 respectively.  Both these stocks carry a Zacks Rank #1 (Strong Buy).

BROWN & BROWN (BRO): Free Stock Analysis Report

EHEALTH INC (EHTH): Free Stock Analysis Report

FIDELITY NAT FI (FNF): Free Stock Analysis Report

RLI CORP (RLI): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Earnings , Stocks

Referenced Stocks: BRO , EHTH , FNF , RLI

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