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Brown & Brown (BRO) Beats Q1 Earnings & Revenue Estimates


Brown & Brown, Inc. BRO reported first-quarter 2017 earnings of 43 cents per share that beat the Zacks Consensus Estimate by 2.4%. However, earnings declined 4.4% year over year due to higher expenses.

Behind the Headlines

Total revenue amounted to $465.1 million, which beat the Zacks Consensus Estimate of $443 million by approximately 5%. Also, the top line improved 9.6% year over year on higher commissions and fees. Organic revenue growth was 3.5% in the reported quarter.

Commissions and fees rose 5.3% year over year to $444.6 million.

Investment income plunged 50% year over year to $0.2 million.

Total expenses increased 10.1% to $354.1 million due to a rise in employee compensation and benefits, other operating expenses, and higher depreciation.

Net income before interest, income taxes, depreciation, amortization and change in estimated acquisition earn-out payables (EBITDAC) margin increased 10 basis points to 32.8%.

Financial Update

Brown & Brown exited the first quarter with cash and cash equivalents of $546.7 million, up 6% from year-end 2016.

Long-term debt was $1.005 billion as of Mar 31, 2017, down 1.3% from $1.0184 billion at the end of 2016.

Dividend Update

This Zacks Rank #3 (Hold) company’s board of directors declared a quarterly cash dividend of 13.5 cents per share on Apr 17, 2017. The dividend will be paid on May 17, to shareholders on record as of May 8, 2017.

Brown & Brown, Inc. Price, Consensus and EPS Surprise

Brown & Brown, Inc. Price, Consensus and EPS Surprise | Brown & Brown, Inc. Quote

Stocks to Consider

Some better-ranked stocks from the insurance industry are CNA Financial Corporation CNA, Cincinnati Financial Corporation CINF and Everest Re Group, Ltd. RE. Each of these stocks holds a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

CNA Financial Corporation offers commercial property and casualty insurance products, primarily in the United States. The company is expected to release first-quarter results on May 1.

Cincinnati Financial deals in the property-casualty insurance business in the United States. The company is slated to release first-quarter results on Apr 26.

Everest Re Group offers reinsurance and insurance products. The company is set to release first-quarter results on Apr 24.

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