Summary
Arthur J. Gallagher & Co. (AJG) reported its first-quarter 2010 results, demonstrating resilience and growth driven by its core brokerage and risk management segments. Total revenues increased by 20% year-over-year to $482.4 million, primarily due to the inclusion of clean-coal activities and strong performance in supplemental and contingent commissions. Net earnings rose to $29.2 million ($0.28 per diluted share), a notable increase from $26.4 million ($0.27 per diluted share) in the prior year period, reflecting effective cost management and operational efficiencies. The company's strategic focus on acquisitions continued to contribute to its growth, with several new brokerage firms integrated into the Brokerage Segment. While organic growth in commissions and fees saw a slight decline, this was offset by robust growth in supplemental and contingent commissions, indicating an improving market for these revenue streams. The Risk Management segment showed stable performance, with revenues slightly down but earnings improving due to effective cost control. The Corporate segment saw a significant revenue boost from clean-coal activities, although a net loss was reported due to associated costs and investment adjustments.
Financial Highlights
26 data points| Revenue | $482.40M |
| Cost of Revenue | $64.00M |
| Gross Profit | $418.40M |
| Operating Expenses | $81.20M |
| Operating Income | $29.20M |
| Interest Expense | $8.60M |
| Net Income | $29.20M |
| EPS (Basic) | $0.28 |
| EPS (Diluted) | $0.28 |
Key Highlights
- 1Total revenues increased by 20% to $482.4 million, driven by clean-coal activities and growth in supplemental/contingent commissions.
- 2Net earnings increased to $29.2 million, or $0.28 per diluted share, compared to $26.4 million, or $0.27 per diluted share, in Q1 2009.
- 3Brokerage segment revenue grew 5% to $304.4 million, with supplemental and contingent commissions up significantly (47%), despite a slight organic decline in core commissions and fees.
- 4Risk Management segment earnings from continuing operations increased 6% to $9.2 million, benefiting from effective expense management despite a 2% revenue decline.
- 5The company reported significant progress in its clean-coal ventures, contributing $62.7 million in revenues, though with associated costs impacting the Corporate segment's profitability.
- 6Diluted EPS remained strong at $0.28, consistent with the prior year's continuing operations EPS, highlighting stable profitability on a per-share basis.