Brown & Brown Beats Earnings Sending Shares Higher

Brown & Brown Beats Earnings Sending Shares Higher

Briefly

"Brown & Brown ( NYSE: BRO) beat both earnings and revenue expectations in Q3, delivering adjusted diluted EPS of $1.05 against a $0.93 estimate and revenue of $1.606 billion versus $1.539 billion expected. The stock is trading $89.99 after-hours, though the company has spent much of the year struggling. This earnings beat arrives as the stock sits oversold and well below its 200-day moving average, setting up a potential inflection point if management can convince investors the growth is sustainable."

"Revenue surged 35.4% year over year, but that headline masks a more nuanced picture. Commissions and fees climbed to $1.55 billion, up 34.2%, while organic revenue growth came in at just 3.5%. The gap tells you most of the expansion came from acquisitions. CEO J. Powell Brown noted the company welcomed over 5,000 new teammates in Q3 alone, underscoring the scale of integration happening right now. That's a significant headcount addition in a single quarter, which typically signals major M&A closings."

"Net income fell 3.0% year over year to $227 million, and diluted earnings per share dropped 16.0% to $0.68. That disconnect between adjusted EPS (up significantly) and reported EPS (down significantly) points to higher integration costs, amortization from acquisitions, or one-time charges hitting the bottom line. It's the clearest sign that while the operating business is performing well, the acquisition machinery is expensive in the near term."