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Brown & Brown's (BRO) Q2 Earnings, Revenues Top, Rise Y/Y
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Brown & Brown, Inc.’s (BRO - Free Report) second-quarter 2022 adjusted earnings of 51 cents per share surpassed the Zacks Consensus Estimate as well as the year-ago quarter earnings by 4.1%.
The results reflect improved organic growth and higher commissions and fees, partly offset by higher expenses.
Brown & Brown, Inc. Price, Consensus and EPS Surprise
Total revenues of $839.7 million outpaced the Zacks Consensus Estimate by 4.4%. The top line improved 15.5% year over year. The upside can primarily be attributed to increased commission and fees, which grew 15.5% year over year to $816.6 million.
Organic revenues improved 10.3% to $775.7 million in the quarter under review.
Investment income doubled year over year to $0.4 million.
Adjusted EBITDAC was $274.7 million, up 16.9% year over year. EBITDAC margin expanded 30 basis points year over year to 32.7%.
Total expenses increased 18.5% to $640.9 million, courtesy of a rise in employee compensation and benefits, other operating expenses, amortization, depreciation and interest expenses.
Financial Update
Brown & Brown exited second-quarter 2022 with cash and cash equivalents of $2.4 billion, up more than three-fold from the 2021-end level.
Long-term debt of $3.5 billion as of Jun 30, 2022 more than doubled from 2021 end.
Net cash provided by operating activities in the first half of 2022 was $34.2 million, down 8.9% year over year.
Of the insurance industry players that have reported second-quarter results so far, The Travelers Companies (TRV - Free Report) and RLI Corporation (RLI - Free Report) beat the respective Zacks Consensus Estimate for earnings, while The Progressive Corporation (PGR - Free Report) met the mark.
Travelers’ core income of $2.57 per share beat the Zacks Consensus Estimate by 28.5% but decreased 26% year over year. Total revenues increased 7% year over year, primarily due to higher premiums and beat the consensus estimate by 1.8%. Net written premiums increased 11%, driven by strong retention rates and positive renewal premium changes across all the segments. Underwriting gain of $113 million decreased 65% year over year in the reported quarter.
Travelers’ combined ratio deteriorated 300 bps year over year to 98.3 due to higher catastrophe losses and a higher underlying combined ratio.
RLI’s operating earnings of $1.49 per share beat the Zacks Consensus Estimate by 6.1% and improved 36.7% from the prior-year quarter. Operating revenues were $301.3 million, up 16.9% year over year, driven by 17.3% higher net premiums earned and 10.5% higher net investment income. The top line beat the Zacks Consensus Estimate of $276 million by 0.9%.
RLI’s underwriting income of $56 million increased 53%, primarily due to the strong performance of the Property and Surety segments. The combined ratio improved 460 bps year over year to 80.2.
Progressive’s earnings per share of 95 cents came in line with the Zacks Consensus Estimate. The bottom line declined 37.1% year over year. Net premiums written were $12.4 billion in the quarter, up 8% from $11.7 billion a year ago.
Progressive’s net premiums earned grew 13% to $12.1 billion. The combined ratio improved 90 bps from the prior-year quarter’s level to 95.6.
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Brown & Brown's (BRO) Q2 Earnings, Revenues Top, Rise Y/Y
Brown & Brown, Inc.’s (BRO - Free Report) second-quarter 2022 adjusted earnings of 51 cents per share surpassed the Zacks Consensus Estimate as well as the year-ago quarter earnings by 4.1%.
The results reflect improved organic growth and higher commissions and fees, partly offset by higher expenses.
Brown & Brown, Inc. Price, Consensus and EPS Surprise
Brown & Brown, Inc. price-consensus-eps-surprise-chart | Brown & Brown, Inc. Quote
Q2 in Details
Total revenues of $839.7 million outpaced the Zacks Consensus Estimate by 4.4%. The top line improved 15.5% year over year. The upside can primarily be attributed to increased commission and fees, which grew 15.5% year over year to $816.6 million.
Organic revenues improved 10.3% to $775.7 million in the quarter under review.
Investment income doubled year over year to $0.4 million.
Adjusted EBITDAC was $274.7 million, up 16.9% year over year. EBITDAC margin expanded 30 basis points year over year to 32.7%.
Total expenses increased 18.5% to $640.9 million, courtesy of a rise in employee compensation and benefits, other operating expenses, amortization, depreciation and interest expenses.
Financial Update
Brown & Brown exited second-quarter 2022 with cash and cash equivalents of $2.4 billion, up more than three-fold from the 2021-end level.
Long-term debt of $3.5 billion as of Jun 30, 2022 more than doubled from 2021 end.
Net cash provided by operating activities in the first half of 2022 was $34.2 million, down 8.9% year over year.
Zacks Rank
Brown & Brown currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Some Other Insurers
Of the insurance industry players that have reported second-quarter results so far, The Travelers Companies (TRV - Free Report) and RLI Corporation (RLI - Free Report) beat the respective Zacks Consensus Estimate for earnings, while The Progressive Corporation (PGR - Free Report) met the mark.
Travelers’ core income of $2.57 per share beat the Zacks Consensus Estimate by 28.5% but decreased 26% year over year. Total revenues increased 7% year over year, primarily due to higher premiums and beat the consensus estimate by 1.8%. Net written premiums increased 11%, driven by strong retention rates and positive renewal premium changes across all the segments. Underwriting gain of $113 million decreased 65% year over year in the reported quarter.
Travelers’ combined ratio deteriorated 300 bps year over year to 98.3 due to higher catastrophe losses and a higher underlying combined ratio.
RLI’s operating earnings of $1.49 per share beat the Zacks Consensus Estimate by 6.1% and improved 36.7% from the prior-year quarter. Operating revenues were $301.3 million, up 16.9% year over year, driven by 17.3% higher net premiums earned and 10.5% higher net investment income. The top line beat the Zacks Consensus Estimate of $276 million by 0.9%.
RLI’s underwriting income of $56 million increased 53%, primarily due to the strong performance of the Property and Surety segments. The combined ratio improved 460 bps year over year to 80.2.
Progressive’s earnings per share of 95 cents came in line with the Zacks Consensus Estimate. The bottom line declined 37.1% year over year. Net premiums written were $12.4 billion in the quarter, up 8% from $11.7 billion a year ago.
Progressive’s net premiums earned grew 13% to $12.1 billion. The combined ratio improved 90 bps from the prior-year quarter’s level to 95.6.