Arthur J. Gallagher & Co. Quarterly Report for Q1 Ended Mar 31, 2019

Summary

Arthur J. Gallagher & Co. (AJG) reported solid financial results for the first quarter of 2019, demonstrating continued growth driven by its core brokerage and risk management segments. Total revenues increased by 8.3% year-over-year to $1,990.6 million, reflecting strong performance in commissions and fees, as well as significant gains from divestitures. Net earnings attributable to controlling interests rose by 22.1% to $334.1 million, and diluted EPS grew by 20.3% to $1.77. The company's strategic acquisitions continue to contribute positively to revenue and market expansion, as evidenced by the acquisition of several firms during the quarter. While the 'Corporate' segment, largely driven by clean energy investments, saw a decrease in revenue and increased losses before income taxes, the core insurance brokerage and risk management segments showed robust performance. The company also highlighted its continued commitment to returning value to shareholders through increased dividends. Management expressed confidence in the company's liquidity and ability to fund future growth and acquisitions.

Key Highlights

• 1Total revenues increased by 8.3% to $1,990.6 million in Q1 2019 compared to Q1 2018.
• 2Net earnings attributable to controlling interests grew by 22.1% to $334.1 million.
• 3Diluted earnings per share (EPS) increased by 20.3% to $1.77.
• 4The Brokerage segment's revenues increased by 15.6% to $1,381.9 million, driven by acquisitions and organic growth.
• 5Net gains on divestitures amounted to $57.1 million, contributing significantly to revenue.
• 6Dividends declared per common share increased to $0.43 from $0.41 in the prior year's quarter.
• 7The company completed 11 acquisitions during the first quarter of 2019.

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