Arthur J. Gallagher Q3 Earnings Match Estimates, Revenues Rise Y/Y

Arthur J. Gallagher & Co. AJG reported third-quarter 2024 adjusted net earnings of $2.26 per share, which matched the Zacks Consensus Estimate. The bottom line increased 13% on a year-over-year basis.Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.Arthur J. Gallagher’s performance was driven by higher revenues and margin expansion across the Brokerage and Risk Management segments, partially offset by higher expenses.Arthur J. Gallagher & Co. Price, Consensus and EPS Surprise Arthur J. Gallagher & Co. price-consensus-eps-surprise-chart | Arthur J. Gallagher & Co. QuoteOperational UpdateTotal adjusted revenues of $2.7 billion missed the Zacks Consensus Estimate by 0.1%. However, the top line improved 11.1% year over year. Arthur J. Gallagher’s total expenses increased 13% year over year to $2.4 billion in the reported quarter due to higher compensation, operating, reimbursements, interest, depreciation and amortization.Adjusted earnings before interest, tax, depreciation and amortization and change in estimated acquisition earnout payables (EBITDAC) grew 14.3% from the prior-year quarter to $808.8 million.Segmental ResultsBrokerage: Revenues of $2.3 billion increased 13% year over year on higher commissions, fees, supplemental revenues, contingent revenues, interest income, premium finance revenues and other income.Expenses jumped 13% from the year-ago quarter to $1.9 billion due to higher compensation, operating expense, amortization and depreciation. Adjusted EBITDAC climbed 16% from the year-ago level to $797.7 million. Margin expanded 140 basis points (bps) to 33.6%.Risk Management: Revenues were up 11% year over year to $410 million, mainly owing to higher fees and interest income and other income. Expenses rose 11.6% from the prior-year period to $349.3 million on higher compensation, operating, reimbursements, depreciation and amortization. Adjusted EBITDAC improved 12.7% year over year to $76.9 million. Margin expanded 30 bps to 20.8%.Corporate: EBITDAC was a negative $65.8 million compared with a negative $49.1 million in the year-ago quarter.Financial UpdateAs of Sept. 30, 2024, total assets were $57.2 billion, up 10.9% from the 2023-end level. At the end of the quarter, cash and cash equivalents of $2 billion doubled from the 2023-end level. As of Sept. 30, 2024, shareholders’ equity increased 13% to $12.2 billion from the level as of Dec. 31, 2023.Dividend UpdateThe board of directors approved a quarterly cash dividend of 60 cents per share. The dividend will be paid out on Dec. 20 to shareholders of record at the close of business as of Dec. 6, 2024.  Acquisition UpdateIn the quarter, Arthur J. Gallagher closed three acquisitions with estimated annualized revenues of about $32.7 million.Zacks RankAJG 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 Other PlayersMarsh & McLennan Companies, Inc. MMC reported third-quarter 2024 adjusted earnings per share of $1.63, which beat the Zacks Consensus Estimate by 1.2%. The bottom line advanced 3.8% year over year.  Consolidated revenues rose 6% year over year to $5.7 billion. The figure also improved 5% on an underlying basis. The top line, however, fell short of the consensus mark by 0.2%. Total operating expenses of $4.59 billion increased 4.6% year over year and were higher than our model estimate of $4.55 billion. Expenses of the Risk and Insurance Services segment escalated 6.7% year over year, while the Consulting segment’s expenses inched up 1% year over year. Marsh & McLennan’s adjusted operating income was $1.19 billion in the third quarter, which grew 12% year over year but missed our estimate of $1.21 billion. The Travelers Companies TRV reported third-quarter 2024 core income of $5.24 per share, which beat the Zacks Consensus Estimate by 38.2%. Travelers’ total revenues increased 10.7% from the year-ago quarter to $11.84 billion, primarily driven by higher premiums, net investment income, fee income and other revenues. The top-line figure beat the Zacks Consensus Estimate by 1.4%.Net written premiums increased 8% year over year to a record $11.31 billion, driven by strong growth across all three segments. The figure was higher than our estimate of $10.5 billion. Net investment income increased 18% year over year to $904 million. The figure was higher than our estimate of $868.7 million. The Zacks Consensus Estimate was pegged at $883 million. Catastrophe loss was $939 million, pre-tax, wider than a loss of $850 million, pre-tax, incurred in the year-ago quarter.W.R. Berkley Corporation’s WRB third-quarter 2024 operating income of 93 cents per share beat the Zacks Consensus Estimate by 1.1%. The bottom line improved 3.3% year over year. W.R. Berkley’s net premiums written were a record $3.1 billion, up 7.3% year over year. The figure was $3.1 billion. Operating revenues came in at $3.4 billion, up 10.9% year over year, on the back of higher net premiums earned as well as improved net investment income. The top line missed the consensus estimate by 0.8%.Net investment income surged 19.5% to a record $323.8 million. The figure was lower than our estimate of $382.1 million. The Zacks Consensus Estimate was $343 million. Total expenses increased 12.1% to $2.9 billion. The figure matched our estimate. The loss ratio deteriorated 50 bps to 62.4, while the expense ratio deteriorated 20 bps year over year to 28.5.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.7% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report The Travelers Companies, Inc. (TRV): Free Stock Analysis Report W.R. Berkley Corporation (WRB): Free Stock Analysis Report Marsh & McLennan Companies, Inc. (MMC): Free Stock Analysis Report Arthur J. Gallagher & Co. 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