Summary
Arthur J. Gallagher & Co. (AJG) reported strong performance for the nine months ended September 30, 2012, with total revenues reaching $1.85 billion, a significant increase from $1.56 billion in the prior year period. This growth was primarily driven by a substantial rise in commissions and fees within the brokerage segment, augmented by strategic acquisitions. Net earnings for the nine-month period also saw a healthy increase, rising to $161.5 million from $103.6 million year-over-year, with diluted EPS improving to $1.33 from $0.93. The company continued its aggressive acquisition strategy, completing 38 acquisitions in the first nine months of 2012, contributing significantly to revenue growth, particularly in the brokerage segment. While this growth is positive, investors should note the ongoing integration costs associated with these acquisitions, which are detailed in the Management's Discussion and Analysis. The company also highlighted positive organic growth in both its brokerage and risk management segments, indicating underlying business strength beyond M&A activity. The clean energy investments also contributed positively to net earnings.
Financial Highlights
45 data points| Revenue | $650.40M |
| Cost of Revenue | $27.70M |
| Gross Profit | $622.70M |
| Operating Expenses | $121.60M |
| Operating Income | $61.70M |
| Interest Expense | $10.70M |
| Net Income | $61.70M |
| EPS (Basic) | $0.50 |
| EPS (Diluted) | $0.50 |
| Shares Outstanding (Basic) | 123.10M |
Key Highlights
- 1Total revenues increased by 18.7% to $1.85 billion for the nine months ended September 30, 2012.
- 2Net earnings grew significantly by 55.9% to $161.5 million for the nine months ended September 30, 2012.
- 3Diluted EPS improved to $1.33 for the nine months ended September 30, 2012, up from $0.93 in the prior year period.
- 4The company completed 38 acquisitions in the first nine months of 2012, contributing to revenue growth.
- 5Brokerage segment revenues grew by 17% to $1.34 billion for the nine months ended September 30, 2012.
- 6Risk Management segment revenues grew by 5.8% to $426.9 million for the nine months ended September 30, 2012.
- 7The company maintained a strong balance sheet with total assets of $5.01 billion and stockholders' equity of $1.64 billion as of September 30, 2012.