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BROWN & BROWN REPORTS Q3 2022 EARNINGS BELOW CONSENSUS ESTIMATES

Brown & Brown, Inc. reported third quarter 2022 results with quarterly revenue of $927.6 million, a 20.4% increase over 3Q21, and adjusted Earnings Per Share (EPS) of $0.50 which is almost 17% lower than projections. Consensus projections for 3Q22 were $0.60 EPS on $943.6 million in revenue. Read the five things you should know about this call.

Brown & Brown, Inc. (BRO) reported third quarter 2022 results with quarterly revenue of $927.6 million, a 20.4% increase over 3Q21, and adjusted Earnings Per Share (EPS) of $0.50 which is almost 17% lower than projections. Consensus projections for 3Q22 were $0.60 EPS on $943.6 million in revenue. Here are five things you should know about this call: 

  1. Strong total and organic revenue growth was noted, with organic revenue increasing by 6.7% in the third quarter. Adjusted EBITDAC (defined as income before interest, income taxes, depreciation, amortization and the change in estimated acquisition earn-out payables) increased 5.8% from 3Q21 to $289.8 million, making the adjusted EBITDAC margin 31.2%.
  1. Year-to-date and quarterly results have been heavily affected by losses related to Hurricane Ian. The historic storm’s property damage caused a negative impact to BRO’s profit-sharing contingent commissions of roughly $15 million and caused losses of estimated $11.5 million in capitalized captive insurance facilities. The full impact is still unknown as material flood claims processing will continue into 4Q22 and the first half of 2023.
  2. J. Powell Brown, President and CEO of BRO, commented on the recent acquisitions of Global Risk Partners Limited (GRP) and BdB Limited companies (BdB), “We are pleased with our overall performance for the quarter as we welcomed over 2,500 new teammates from GRP & BdB to Brown & Brown in the United Kingdom, Ireland, Belgium and Italy. We now have approximately 12% of our total revenue from international operations.”
  3. Premium rates for most lines saw relatively consistent growth compared to prior quarters and is estimated to remain on this course. Catastrophe prone areas will continue to be problematic as ongoing high levels of loss are reducing carriers’ appetite resulting in lower limits and increased pricing.
  4. BRO noted that the economy continued to expand, but at a slower rate as more caution arises in investing. The company’s primary areas of concern are inflation, rising interest rates and labor. BRO noted that it expects to deliver a “good fourth quarter and strong top and bottom-line results for 2022,” driven by its high performing team and strong merger & acquisition pipeline.

To learn more visit: News Release – Brown & Brown Q3 2022 Results 

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This earnings summary has been prepared by Marsh, Berry & Co., LLC. and is not intended to provide investment recommendations on any company. It is not a research report, as such term is defined by applicable laws and regulations, and it does not contain sufficient information upon which to make an investment decision. It is not to be construed as an offer to buy or sell or a solicitation of an offer to buy or sell any securities, financial instruments or to participate in any particular trading strategy. These materials are based solely on information contained in publicly available documents and Marsh, Berry & Co., LLC has not independently attempted to investigate or to verify such information.

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