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Brown & Brown (BRO) Q2 Earnings Beat Estimates, Improve Y/Y
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Brown & Brown, Inc.’s (BRO - Free Report) second-quarter 2024 adjusted earnings of 93 cents per share beat the Zacks Consensus Estimate by 6.8%. The bottom line increased 17.7% year over year.
The quarterly results reflected improved organic revenues, expanded EBITDAC margin and increased net investment income, offset by higher expenses.
Brown & Brown, Inc. Price, Consensus and EPS Surprise
Total revenues of $1.2 billion beat the Zacks Consensus Estimate by 3.3%. The top line improved 12.5% year over year. The upside can be primarily attributed to commission and fees, which grew 11.4% year over year to $1.1 billion. Our estimate for commission and fees growth was 7.2%.
Organic revenues improved 10% to $1 billion in the quarter under review.
Investment income more than doubled year over year to $22 million. The Zacks Consensus Estimate for the metric was pegged at $18.6 million and our estimate was $23.2 million.
Adjusted EBITDAC was $420 million, up 17.3% year over year. EBITDAC margin expanded 150 basis points (bps) year over year to 35.7%. Our estimate for adjusted EBITDAC was $411.4 million.
Total expenses increased 5% to $832 million due to a rise in employee compensation and benefits, other operating expenses, amortization, depreciation and interest. Our estimate was $831.4 million.
Financial Update
Brown & Brown exited the second quarter with cash and cash equivalents of $1.1 billion, which increased 58% from the 2023-end level.
Long-term debt was $3.4 billion as of Jun 30, 2024, up 5% from the 2023-end level.
Net cash provided by operating activities in the first half of 2024 was $373 million, down 3.8% year over year.
Dividend Update
The board of directors paid a regular quarterly cash dividend of 13 cents per share in the reported quarter.
Zacks Rank
Brown & Brown currently carries a Zacks Rank #4 (Sell).
The Progressive Corporation’s (PGR - Free Report) second-quarter 2024 earnings per share of $2.65 beat the Zacks Consensus Estimate of $1.99. The bottom line improved more than five times year over year. Operating revenues of $18.3 billion beat the Zacks Consensus Estimate by 1.4% and increased 18.9% year over year.
Net premiums earned grew 19% to $17.2 billion and beat our estimate of $16.7 billion. Combined ratio improved 850 bps from the prior-year quarter’s level to 91.9.
The Travelers Companies, Inc. (TRV - Free Report) reported second-quarter 2024 core income of $2.51 per share, which beat the Zacks Consensus Estimate by 25.5%. Travelers’ total revenues increased 12.4% from the year-ago quarter to $11.3 billion. The top-line figure, however, missed the Zacks Consensus Estimate by 1%. Net written premiums increased 8% year over year to a record $11.1 billion. The figure was higher than our estimate of $10.4 billion.
Net investment income increased 24.2% year over year to $885 million. The figure was higher than our estimate of $852.14 million. The Zacks Consensus Estimate was pegged at $861.2 million. Catastrophe loss was $1.51 billion, pre-tax, wider than a loss of $1.18 million, pre-tax, incurred in the year-ago quarter. Travelers witnessed an underwriting loss of $65 million, narrower than a loss of $640 million incurred in the year-ago quarter.
Selective Insurance Group, Inc. (SIGI - Free Report) reported second-quarter 2024 operating loss of $1.10 per share against the Zacks Consensus Estimate for earnings of $1.56. The company had reported an operating income of 99 cents per share in the prior-year quarter. Total revenues of $1.2 billion increased 15% from the year-ago quarter’s figure, primarily due to higher premiums earned, net investment income and net premiums written. The top line missed the Zacks Consensus Estimate by 1.3%.
On a year-over-year basis, net premium written increased 13% to $1.22 billion. The figure matched our estimate. After-tax net investment income increased 11% year over year to $86 million. After-tax net underwriting loss was $137.2 million against the year-ago underwriting income of $1.2 million. Pre-tax catastrophe losses of $91 million were narrower than a loss of $100 million reported in the year-ago quarter. The combined ratio deteriorated 1,590 bps on a year-over-year basis to 116.1.
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Brown & Brown (BRO) Q2 Earnings Beat Estimates, Improve Y/Y
Brown & Brown, Inc.’s (BRO - Free Report) second-quarter 2024 adjusted earnings of 93 cents per share beat the Zacks Consensus Estimate by 6.8%. The bottom line increased 17.7% year over year.
The quarterly results reflected improved organic revenues, expanded EBITDAC margin and increased net investment income, 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 Details
Total revenues of $1.2 billion beat the Zacks Consensus Estimate by 3.3%. The top line improved 12.5% year over year. The upside can be primarily attributed to commission and fees, which grew 11.4% year over year to $1.1 billion. Our estimate for commission and fees growth was 7.2%.
Organic revenues improved 10% to $1 billion in the quarter under review.
Investment income more than doubled year over year to $22 million. The Zacks Consensus Estimate for the metric was pegged at $18.6 million and our estimate was $23.2 million.
Adjusted EBITDAC was $420 million, up 17.3% year over year. EBITDAC margin expanded 150 basis points (bps) year over year to 35.7%. Our estimate for adjusted EBITDAC was $411.4 million.
Total expenses increased 5% to $832 million due to a rise in employee compensation and benefits, other operating expenses, amortization, depreciation and interest. Our estimate was $831.4 million.
Financial Update
Brown & Brown exited the second quarter with cash and cash equivalents of $1.1 billion, which increased 58% from the 2023-end level.
Long-term debt was $3.4 billion as of Jun 30, 2024, up 5% from the 2023-end level.
Net cash provided by operating activities in the first half of 2024 was $373 million, down 3.8% year over year.
Dividend Update
The board of directors paid a regular quarterly cash dividend of 13 cents per share in the reported quarter.
Zacks Rank
Brown & Brown currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Insurers
The Progressive Corporation’s (PGR - Free Report) second-quarter 2024 earnings per share of $2.65 beat the Zacks Consensus Estimate of $1.99. The bottom line improved more than five times year over year. Operating revenues of $18.3 billion beat the Zacks Consensus Estimate by 1.4% and increased 18.9% year over year.
Net premiums earned grew 19% to $17.2 billion and beat our estimate of $16.7 billion. Combined ratio improved 850 bps from the prior-year quarter’s level to 91.9.
The Travelers Companies, Inc. (TRV - Free Report) reported second-quarter 2024 core income of $2.51 per share, which beat the Zacks Consensus Estimate by 25.5%. Travelers’ total revenues increased 12.4% from the year-ago quarter to $11.3 billion. The top-line figure, however, missed the Zacks Consensus Estimate by 1%. Net written premiums increased 8% year over year to a record $11.1 billion. The figure was higher than our estimate of $10.4 billion.
Net investment income increased 24.2% year over year to $885 million. The figure was higher than our estimate of $852.14 million. The Zacks Consensus Estimate was pegged at $861.2 million. Catastrophe loss was $1.51 billion, pre-tax, wider than a loss of $1.18 million, pre-tax, incurred in the year-ago quarter. Travelers witnessed an underwriting loss of $65 million, narrower than a loss of $640 million incurred in the year-ago quarter.
Selective Insurance Group, Inc. (SIGI - Free Report) reported second-quarter 2024 operating loss of $1.10 per share against the Zacks Consensus Estimate for earnings of $1.56. The company had reported an operating income of 99 cents per share in the prior-year quarter. Total revenues of $1.2 billion increased 15% from the year-ago quarter’s figure, primarily due to higher premiums earned, net investment income and net premiums written. The top line missed the Zacks Consensus Estimate by 1.3%.
On a year-over-year basis, net premium written increased 13% to $1.22 billion. The figure matched our estimate. After-tax net investment income increased 11% year over year to $86 million. After-tax net underwriting loss was $137.2 million against the year-ago underwriting income of $1.2 million. Pre-tax catastrophe losses of $91 million were narrower than a loss of $100 million reported in the year-ago quarter. The combined ratio deteriorated 1,590 bps on a year-over-year basis to 116.1.