Published on 22 Apr 2024 on Zacks via Yahoo Finance

What Awaits Arthur J. Gallagher (AJG) This Earnings Season?

Arthur J. Gallagher & Co. AJG is slated to report first-quarter 2024 earnings on Apr 25, after market close. The insurer delivered an earnings surprise in each of the last four reported quarters, the average beat being 1.83%.

Factors to Consider

Better performance in both segments, aided by new business, strong retention and increasing renewal premiums across its business lines, is likely to have benefited Arthur J. Gallagher’s first-quarter results.Revenues associated with acquisitions, the organic change in base commissions and fee revenues are likely to have favored commission and fee revenues in the first quarter of 2024. The Zacks Consensus Estimate for fees is pegged at $830 million, indicating an increase of 17.5% from the prior-year period’s reported number. The consensus mark for commissions is pegged at $2.1 billion, implying 20.3% growth from the prior-year period’s reported number.The property and casualty brokerage operations are likely to have been aided by continued strong customer retention, new business generation and increasing renewal premiums in the to-be-reported quarter.The risk management segment is likely to have been aided by rising claim counts and continued growth from recent new business wins.Net investment income in the to-be-reported quarter is likely to have benefited from an increase in interest income from higher interest rates earned on funds. The Zacks Consensus Estimate for net investment income is pegged at $88 million, indicating an increase of 33% from the year-ago reported quarter.Higher commissions and fees, increased supplemental revenues, improved contingent revenues and investment income, as well as strategic mergers and acquisitions, are likely to have driven the top line in the to-be-reported quarter. The Zacks Consensus Estimate for first-quarter revenues is pinned at $3.15 billion, indicating an increase of 17.9% from the year-ago reported figure.Total expenses are likely to have increased mainly because of higher compensation, operating costs, interest expenses, amortization and changes in estimated acquisition earnout payables.The Zacks Consensus Estimate for first-quarter earnings per share is pegged at $3.42, indicating an increase of 12.8% from the year-ago reported figure.