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

Brown & Brown, Inc. BRO reported third-quarter 2020 earnings of 52 cents per share, which beat the Zacks Consensus Estimate by 23.8%. The bottom line surged 33.3% year over year.

The results reflect improved organic growth and margin expansion.

Behind the Headlines    

Adjusted revenues of $674 million beat the Zacks Consensus Estimate by 4.8%. Moreover, the top line rose 8.9% year over year on higher commissions and fees. Organic revenues increased 4.3% in the reported quarter.

Commissions and fees grew 8.7% year over year to $671.4 million.

Investment income plunged 76.5% year over year to $0.4 million.

Total expenses increased 10.4% to $515.5 million due to a rise in employee compensation and amortization and depreciation.

EBITDAC was $220.8 million, up 13.2% year over year. EBITDAC margin expanded 130 basis points (bps) to 32.8%.

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

Financial Update

Brown & Brown exited the third quarter with cash and cash equivalents of $1.5 billion, up about 56% from 2019-end level.

Long-term debt of $2 billion as of Sep 30, 2019 was up 36.5% from 2019 end.

Net cash provided by operating activities in the first nine months of 2020 was $539.6 million, up 20.7% year over year.

Dividend Update

The company paid cash dividend of 8.5 cents per share in the third 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 Other Insurers

Of the insurance industry players that have reported third-quarter results so far, The Progressive Corporation PGR, The Travelers Companies TRV and RLI Corp. RLI beat the respective Zacks Consensus Estimate for earnings.

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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 Nasdaq, Inc.

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