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-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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