Brown & Brown Inc. (BRO) reported operating net income of 32 cents per share for the fourth quarter of 2013, which missed the Zacks Consensus Estimate by 3 cents. However, the results improved 10.3% from 29 cents per share earned in the year-ago quarter.
The improvement was primarily driven by solid performance across three business divisions.
Behind the Headlines
Total revenue of Brown & Brown amounted to $343.2 million in the quarter, missing the Zacks Consensus Estimate of $349 million. The results also improved 13.3% year over year driven by higher commissions and fees and other income.
Among the four business divisions of the company, Wholesale Brokerage and National Programs exhibited higher organic revenue growth rates of 14.7% and 9.9% respectively, whereas organic growth rate at Retail Divisions inched up 0.2%. Service division witnessed a 17.8% decline.
Investment income slumped 46% year over year.
Total expense increased 14.2% year over year to $266.7 million.
Pretax income improved 10.4% from the prior-year quarter to $76.4 million.
Full Year Highlights
Brown & Brown delivered earnings per share of $1.48 per share for 2013 on revenues of $1.36 billion.
Financial Update
Brown & Brown exited 2013 with cash and cash equivalents of approximately $202.9 million compared with $219.8 million reported at 2012 end.
Long-term debt of the company stood at $380 million at the end of 2013 improving from $450 million reported at the end of 2012.
Dividend Update
In Oct 2013, the board of directors of the company approved an 11.1% increase in its quarterly dividend to 10 cents per share.
Brown & Brown will pay a quarterly cash dividend of 10 cents per share on Feb 19, 2014 to the shareholders of record as of Feb 5.
Zacks Rank
Brown & Brown presently carries a Zacks Rank #3 (Hold).
Performance of Other Insurance Brokers
Aon plc (AON) delivered fourth-quarter 2013 operating earnings of $1.54 per share beating the Zacks Consensus Estimate by a penny. The results also outpaced the year-ago quarter’s earnings by 21%.
Arthur J Gallagher & Co. (AJG) reported fourth-quarter operating net earnings of 48 cents a share that missed the Zacks Consensus Estimate by a penny. However, the result increased from the prior-year quarter number by 23.1%.
Validus Holdings, Ltd. (VR) posted fourth-quarter earnings per share of 92 cents, lagging the Zacks Consensus estimate by 42%. Results, however, rebounded from a loss of $1.63 per share reported a year ago.
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