Summary
Arthur J. Gallagher & Co. (AJG) reported a solid third quarter for 2016, with consolidated revenues increasing to $1,482.3 million, up from $1,454.8 million in the prior year's period. Net earnings attributable to controlling interests were $122.8 million, or $0.69 per diluted share, compared to $133.3 million, or $0.75 per diluted share, in the same period last year. The slight decrease in net earnings was influenced by various adjustments and the impact of clean energy investments. The brokerage segment demonstrated strong revenue growth, driven by new business and acquisitions, with organic revenue growth of 2.4% in commissions and fees. The company also continued its acquisition strategy, completing several new deals during the period, which contributed to overall revenue expansion. Financially, AJG maintained a healthy liquidity position, with cash and cash equivalents increasing to $531.8 million. The company's debt levels remained significant but manageable, with $2,400.0 million in note purchase agreements and $258.0 million outstanding under its credit agreement. Management highlighted positive contributions from its clean energy investments, anticipating they would generate between $111.0 million and $119.0 million in net earnings for the full year, which are expected to fund its acquisition strategy. The company also reaffirmed its dividend policy, increasing the quarterly dividend to $0.38 per common share.
Financial Highlights
45 data points| Revenue | $1.48B |
| Operating Expenses | $1.39B |
| Interest Expense | $28.50M |
| Net Income | $122.80M |
| EPS (Basic) | $0.69 |
| EPS (Diluted) | $0.69 |
| Shares Outstanding (Basic) | 177.60M |
Key Highlights
- 1Consolidated revenues increased by 2.0% year-over-year to $1,482.3 million for Q3 2016.
- 2Brokerage segment revenues grew by 5.1% to $877.6 million, with organic commissions and fees increasing by 2.4%.
- 3Net earnings attributable to controlling interests decreased slightly to $122.8 million in Q3 2016 from $133.3 million in Q3 2015.
- 4Diluted earnings per share for the quarter were $0.69, down from $0.75 in the prior year's comparable period.
- 5The company completed 28 acquisitions during the first nine months of 2016, contributing to revenue growth.
- 6Cash and cash equivalents stood at $531.8 million as of September 30, 2016, up from $480.4 million at the end of 2015.
- 7Clean energy investments are projected to generate between $111.0 million and $119.0 million in net earnings for the full year 2016.