Summary
Arthur J. Gallagher & Co. (AJG) reported solid financial results for the six months ending June 30, 2019. Total revenues grew to $3.65 billion, an increase driven by strong performance in the Brokerage segment, which saw revenues climb to $2.51 billion, up 14% year-over-year. This growth was fueled by a combination of acquisitions and robust organic growth in commissions and fees. The Risk Management segment also showed modest revenue growth, reaching $478.5 million. The company's net earnings attributable to controlling interests were $444.2 million for the first six months of 2019, a significant increase from $388.6 million in the prior year, reflecting improved profitability across its core operations. AJG continued its strategic growth through acquisitions, investing $733.9 million in the first half of 2019 for new businesses, expanding its market reach and service capabilities. The company also maintained a disciplined approach to capital management, increasing its credit facility and demonstrating a commitment to shareholder returns through consistent dividend payments. While the corporate segment, largely influenced by clean energy investments, experienced a decline in revenue, the core brokerage and risk management segments delivered strong operational performance, positioning AJG for continued growth.
Financial Highlights
45 data points| Revenue | $1.66B |
| Cost of Revenue | $292.00M |
| Gross Profit | $1.37B |
| Operating Expenses | $1.55B |
| Interest Expense | $44.90M |
| Net Income | $110.10M |
| EPS (Basic) | $0.59 |
| EPS (Diluted) | $0.58 |
| Shares Outstanding (Basic) | 185.80M |
Key Highlights
- 1Total revenues increased to $3.65 billion for the six months ended June 30, 2019, up from $3.50 billion in the prior year.
- 2Brokerage segment revenues grew by 14% to $2.51 billion for the six months ended June 30, 2019, driven by acquisitions and organic growth.
- 3Net earnings attributable to controlling interests increased to $444.2 million for the first six months of 2019, up from $388.6 million in the same period of 2018.
- 4The company invested $733.9 million in acquisitions during the first six months of 2019, indicating a continued focus on strategic expansion.
- 5Diluted net earnings per share (EPS) rose to $2.35 for the six months ended June 30, 2019, compared to $2.10 in the prior year.
- 6The company amended and restated its credit agreement, increasing the revolving credit commitment to $1.2 billion, enhancing financial flexibility.
- 7The clean energy segment, while facing revenue declines, contributed positively to overall earnings, with estimated full-year 2019 net earnings from these investments projected between $95-$110 million.