Brown & Brown Earnings Preview

Brown & Brown (NYSE: BRO  ) came in under analysts' estimates last quarter, but now have a chance to fix things this quarter. The company will unveil its latest earnings on Monday. Brown & Brown operates as an insurance agency, wholesale brokerage, insurance programs, and service organization. It provides its customers with quality, non-investment insurance contracts, as well as other targeted, customized risk management products.

What analysts say:

  • Buy, sell, or hold? Analysts think investors should stand pat on Brown & Brown with 11 of 14 analysts rating it hold. Analysts don't like Brown & Brown as much as competitor Arthur J. Gallagher overall. Four out of 13 analysts rate Arthur J. Gallagher a buy compared to three of 14 for Brown & Brown. Analysts still rate the stock a hold, but they are a bit more wary about it compared to three months ago.
  • Revenue forecasts: On average, analysts predict $257.7 million in revenue this quarter. That would represent a rise of 5.8% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of 30 cents per share. Estimates range from 29 cents to 32 cents.

What our community says:
CAPS All Stars are solidly backing the stock with 96.4% granting it an "outperform" rating. The community at large agrees with the All Stars with 91.4% awarding it a rating of "outperform." Fools are keen on Brown & Brown, though the message boards have been quiet lately with only 52 posts in the past 30 days. Brown & Brown has a bullish CAPS rating of five out of five stars that is about on par with the Fool community assessment.

Management:
Brown & Brown's profit has risen year over year by an average of 12.6%. Revenue has now gone up for three straight quarters.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows net margins over the past four quarters.

Quarter

Q1

Q4

Q3

Q2

Net Margin

17.7%

14%

17.9%

16.9%

For all our Brown & Brown-specific analysis, including earnings and beyond, add Brown & Brown to My Watchlist.

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