Arthur J. Gallagher (AJG) could be a solid choice for investors given its recent upgrade to a Zacks Rank #2 (Buy). This rating change essentially reflects an upward trend in earnings estimates -- one of the most powerful forces impacting stock prices.The sole determinant of the Zacks rating is a company's changing earnings picture. The Zacks Consensus Estimate -- the consensus of EPS estimates from the sell-side analysts covering the stock -- for the current and following years is tracked by the system.The ...

Investors interested in Finance stocks should always be looking to find the best-performing companies in the group. Arthur J. Gallagher (AJG) is a stock that can certainly grab the attention of many investors, but do its recent returns compare favorably to the sector as a whole? Let's take a closer look at the stock's year-to-date performance to find out.Arthur J. Gallagher is a member of our Finance group, which includes 862 different companies and currently sits at #3 in the Zacks Sector Rank. The Zacks S ...

Revenue and Earnings Performance - For the six-month period ended June 30, 2024, approximately 64% of revenues were generated domestically and 36% internationally, with the brokerage and risk management segments contributing approximately 87% and 13% to revenues, respectively [147]. - Brokerage segment revenues for Q2 2024 reached $2,376.3 million, a 14% increase from $2,088.4 million in Q2 2023 [151]. - Organic revenues in the brokerage segment for Q2 2024 were $2,145.9 million, up 7.7% from $1,993.4 million in Q2 2023 [151]. - Net earnings for the total company in Q2 2024 were $332.8 million, reflecting a 15% increase compared to $290.3 million in Q2 2023 [151]. - For the six-month period ended June 30, 2024, total revenues were $5,241.2 million, a 17% increase from $4,463.6 million in the same period of 2023 [153]. - Organic revenues for the six-month period in 2024 were $4,672.4 million, representing an 8.3% increase from $4,313.5 million in 2023 [153]. - Net earnings for the six-month period in 2024 were $985.4 million, a 22% increase from $805.6 million in 2023 [153]. - Total revenues before reimbursements increased to $2,736.0 million, up 13.7% from $2,406.9 million in the same period of 2023 [156]. - The total company reported net earnings for the three-month period ended June 30, 2024, were $285.4 million, compared to $235.8 million in 2023, marking an increase of 21% [156]. - The total company adjusted revenues for the six-month period ended June 30, 2024, were $5,925.7 million, a 17% increase from $5,069.6 million in 2023 [159]. Segment Performance - The risk management segment reported revenues before reimbursements of $358.6 million in Q2 2024, a 13% increase from $318.6 million in Q2 2023 [151]. - The risk management segment accounted for 13% of total revenue during the six-month period ended June 30, 2024, with total revenues of $789.4 million, up from $684.4 million in the same period of 2023 [185][186]. - Adjusted EBITDAC for the brokerage segment in Q2 2024 was $784.8 million, an 18% increase from $665.7 million in Q2 2023 [151]. - The risk management segment, as adjusted for the six-month period ended June 30, 2024, reported net earnings of $94.5 million, with a diluted net earnings per share of $0.42 [162]. Tax and Compensation - The effective tax rate is expected to be approximately 24.5% to 26.5% in the brokerage segment and 25.0% to 27.0% in the risk management segment for the foreseeable future [145]. - The effective income tax rate for both the three and six-month periods ended June 30, 2024, was 25%, down from 26% in the same periods of 2023 [166]. - The effective income tax rate for the brokerage segment was 25.4% for the three-month period and 25.5% for the six-month period ended June 30, 2024, with an anticipated future effective tax rate of approximately 24.5% to 26.5% [183]. - Reported compensation expense for the three-month period ended June 30, 2024, was $1,370.3 million, up from $1,196.4 million in 2023, marking a $173.9 million increase [173]. Organic Growth and Business Generation - Organic revenue growth is viewed as an important indicator for assessing performance in the brokerage and risk management segments [143]. - The company expects strong new business generation and solid retentions to result in further organic growth opportunities globally [149]. - The company anticipates continued strong customer retention and higher new business generation in its property/casualty brokerage operations for the remainder of 2024 [169]. Acquisitions and Capital Expenditures - The company completed twenty-four acquisitions in the six-month period ended June 30, 2024, compared to twenty-five in the same period of 2023 [230]. - Cash paid for acquisitions was $518.6 million in the six-month period ended June 30, 2024, down from $1,049.5 million in the same period of 2023 [230]. - The company expects total capital expenditures for 2024 to be approximately $150.0 million, focusing on office moves and IT software development projects [229]. Financial Position and Cash Flow - The company had a cash and cash equivalent balance of $1,415.3 million as of June 30, 2024 [232]. - Cash provided by operating activities increased to $908.8 million for the six-month period ended June 30, 2024, up from $440.9 million in 2023, indicating significant growth in core operations [224]. - The company believes it has sufficient capital and access to additional capital to meet its short- and long-term cash flow needs [251]. Market Risks and Foreign Currency - The company is exposed to foreign currency exchange rate risks from various international operations, including those in the U.K., Australia, Canada, and India [259]. - The company manages foreign currency risks by matching foreign liabilities with equal foreign assets to minimize currency fluctuation effects [259]. - A 10% adverse change in foreign currency exchange rates would increase earnings before income taxes by approximately $41.1 million, while a favorable change would decrease it by approximately $44.3 million [259].

Arthur J. Gallagher & Co. (AJG) reported second-quarter 2024 adjusted net earnings of $2.26 per share, which beat the Zacks Consensus Estimate by 0.8%. The bottom line increased 19.5% on a year-over-year basis.The quarter’s results overall benefited from adjusted EBITDAC margin expansion across the Brokerage and Risk Management segments and higher commissions, fees and supplemental, contingent revenues, premium finance revenues and other income, partly offset by an elevated overall expense level.Operational ...

Arthur J. Gallagher & Co. (NYSE:AJG) Q2 2024 Earnings Conference Call July 25, 2024 5:15 PM ET Company Participants J. Patrick Gallagher - Chairman and Chief Executive Officer Douglas Howell - Chief Financial Officer Conference Call Participants Elyse Greenspan - Wells Fargo Michael Zaremski - BMO Capital Markets Gregory Peters - Raymond James & Associates, Inc. David Motemaden - Evercore ISI Mark Hughes - Truist Securities Robert Cox - Goldman Sachs Group, Inc. Michael Ward - Citigroup Inc. Grace Carter - ...

For the quarter ended June 2024, Arthur J. Gallagher (AJG) reported revenue of $2.74 billion, up 13.7% over the same period last year. EPS came in at $2.26, compared to $1.90 in the year-ago quarter.The reported revenue compares to the Zacks Consensus Estimate of $2.76 billion, representing a surprise of -0.73%. The company delivered an EPS surprise of +0.89%, with the consensus EPS estimate being $2.24.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and h ...

Arthur J. Gallagher (AJG) came out with quarterly earnings of $2.26 per share, beating the Zacks Consensus Estimate of $2.24 per share. This compares to earnings of $1.90 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 0.89%. A quarter ago, it was expected that this insurance and risk-management company would post earnings of $3.40 per share when it actually produced earnings of $3.49, delivering a surprise of 2.65%.Over the l ...

Financial Performance Overview [Second Quarter 2024 Financial Highlights](index=1&type=section&id=Second%20Quarter%202024%20Financial%20Highlights) Arthur J. Gallagher & Co. reported strong growth in the second quarter of 2024, with total company reported revenues before reimbursements increasing 13.7% to $2.74 billion, and adjusted diluted net earnings per share rising to $2.26, a 19.6% increase from $1.89 in the same period last year, driven by solid performance in both the Brokerage and Risk Management segments Total Company Financial Summary - Q2 2024 vs Q2 2023 (in millions, except per share data) | Metric | Q2 2024 (As Reported) | Q2 2023 (As Reported) | Q2 2024 (As Adjusted) | Q2 2023 (As Adjusted) | | :--- | :--- | :--- | :--- | :--- | | **Revenues Before Reimbursements** | $2,736.0 | $2,406.9 | $2,733.9 | $2,392.9 | | **Net Earnings** | $285.4 | $235.8 | $506.6 | $413.8 | | **EBITDAC** | $690.3 | $560.3 | $811.4 | $672.0 | | **Diluted Net Earnings Per Share** | $1.26 | $1.07 | $2.26 | $1.89 | Segment Performance Summary - Q2 2024 (As Adjusted, in millions) | Segment | Revenues Before Reimbursements | Net Earnings | EBITDAC | | :--- | :--- | :--- | :--- | | **Brokerage** | $2,374.3 | $550.4 | $784.8 | | **Risk Management** | $358.5 | $49.1 | $73.9 | [Six-Months 2024 Financial Highlights](index=2&type=section&id=Six-Months%202024%20Financial%20Highlights) For the six months ended June 30, 2024, the company demonstrated continued momentum with reported revenues before reimbursements growing to $5.95 billion, and adjusted diluted EPS for the period was $5.73, a significant increase from $4.90 in the first half of 2023 Total Company Financial Summary - Six Months Ended June 30 (in millions, except per share data) | Metric | 6 Mths 2024 (As Reported) | 6 Mths 2023 (As Reported) | 6 Mths 2024 (As Adjusted) | 6 Mths 2023 (As Adjusted) | | :--- | :--- | :--- | :--- | :--- | | **Revenues Before Reimbursements** | $5,954.1 | $5,079.8 | $5,925.7 | $5,069.6 | | **Net Earnings** | $898.1 | $722.4 | $1,281.2 | $1,068.0 | | **EBITDAC** | $1,746.8 | $1,435.2 | $1,956.9 | $1,629.2 | | **Diluted Net Earnings Per Share** | $4.01 | $3.31 | $5.73 | $4.90 | [Management Commentary](index=2&type=section&id=Management%20Commentary) The Chairman and CEO, J. Patrick Gallagher, Jr., characterized the second quarter as "excellent," citing 14% reported revenue growth and 7.7% organic growth for the combined core segments, noting improved profitability with the adjusted EBITDAC margin expanding by over 100 basis points, and an active M&A strategy with a robust pipeline of over $500 million in annualized revenue - Combined brokerage and risk management segments posted **14% reported revenue growth** and **7.7% organic revenue growth** in Q2 2024[5](index=5&type=chunk) - The company's adjusted EBITDAC margin improved by **more than 100 basis points to 31.4%** in Q2 2024[5](index=5&type=chunk) - M&A activity continued with **12 new mergers completed** in the quarter, adding approximately **$72 million in estimated annualized revenue**, and the current M&A pipeline exceeds **$500 million of annualized revenue**[5](index=5&type=chunk) - Market conditions remain rational, with global insurance renewal premiums up **5%** in the second quarter, and property premium increases are moderating while casualty increases show signs of advancing[6](index=6&type=chunk) Segment Performance Analysis [Brokerage Segment](index=3&type=section&id=Brokerage%20Segment) The Brokerage segment delivered strong Q2 2024 results with 7.7% total organic revenue growth, propelled by a 7.5% increase in organic base commissions and fees, and profitability improved significantly as the adjusted EBITDAC margin expanded by 100 basis points to 33.1%, reflecting effective cost management and revenue leverage [Brokerage Segment Revenue Analysis](index=3&type=section&id=Brokerage%20Segment%20Revenue%20Analysis) In Q2 2024, the Brokerage segment's total organic revenue growth of 7.7% was primarily driven by a 7.5% increase in organic base commissions and fees and a 20.7% surge in organic supplemental revenues, while contingent revenues experienced a slight organic decline of 5.4%, and the company also continued its acquisition strategy, closing 12 deals with an estimated $72.0 million in annualized revenues Brokerage Segment Organic Revenue Growth - Q2 2024 | Revenue Type | Organic Change YoY | | :--- | :--- | | Base Commissions and Fees | 7.5% | | Supplemental Revenues | 20.7% | | Contingent Revenues | -5.4% | | **Total Organic Change** | **7.7%** | Acquisition Activity - Q2 2024 vs Q2 2023 | Metric | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | Number of acquisitions closed | 12 | 15 | | Estimated annualized revenues acquired (in millions) | $72.0 | $349.1 | [Brokerage Segment Expense Analysis](index=4&type=section&id=Brokerage%20Segment%20Expense%20Analysis) The segment maintained cost discipline in Q2 2024, with the adjusted compensation expense ratio flat year-over-year at 53.8% as increased employee benefit costs were offset by savings from headcount controls, and the adjusted operating expense ratio improved by 90 basis points to 13.2%, mainly due to savings in real estate and lower professional fees Brokerage Segment Expense Ratios - Q2 2024 vs Q2 2023 | Expense Ratio | Q2 2024 (Adjusted) | Q2 2023 (Adjusted) | Change (bps) | | :--- | :--- | :--- | :--- | | Compensation Expense Ratio | 53.8% | 53.8% | 0 bps | | Operating Expense Ratio | 13.2% | 14.1% | -90 bps | - The improvement in the adjusted operating expense ratio was primarily driven by savings in real estate expenses from office consolidations, lower professional fees, and reduced business insurance costs[14](index=14&type=chunk) [Brokerage Segment Profitability Analysis](index=5&type=section&id=Brokerage%20Segment%20Profitability%20Analysis) The Brokerage segment's profitability saw a notable increase in Q2 2024, with adjusted EBITDAC growing 17.9% to $784.8 million from $665.7 million in Q2 2023, consequently, the adjusted EBITDAC margin expanded by 100 basis points to 33.1%, up from 32.1% in the prior-year period Brokerage Segment Net Earnings to Adjusted EBITDAC (in millions) | Metric | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | Net earnings, as reported | $332.8 | $290.3 | | **EBITDAC, as adjusted** | **$784.8** | **$665.7** | | Net earnings margin, as reported | 14.0% | 13.9% | | **EBITDAC margin, as adjusted** | **33.1%** | **32.1%** | [Risk Management Segment](index=5&type=section&id=Risk%20Management%20Segment) The Risk Management segment reported a strong Q2 2024 with organic fee growth of 7.7%, and despite an increase in the compensation expense ratio, effective management of operating costs led to an improvement in the adjusted EBITDAC margin, which rose to 20.6% from 19.4% year-over-year [Risk Management Segment Revenue Analysis](index=5&type=section&id=Risk%20Management%20Segment%20Revenue%20Analysis) The segment's revenues were driven by a 7.7% organic increase in fees for Q2 2024, reflecting healthy business activity, with total fees as reported growing to $349.5 million from $312.0 million in the prior year Risk Management Segment Organic Fee Growth - Q2 2024 | Metric | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | Organic fees (in millions) | $335.1 | $311.3 | | **Organic change in fees** | **7.7%** | N/A | [Risk Management Segment Expense Analysis](index=6&type=section&id=Risk%20Management%20Segment%20Expense%20Analysis) In Q2 2024, the adjusted compensation expense ratio increased by 140 basis points to 60.9%, primarily due to higher base compensation and employee benefits, which was more than offset by a 270 basis point improvement in the adjusted operating expense ratio to 18.5%, driven by savings in client-related expenses and professional fees Risk Management Segment Expense Ratios - Q2 2024 vs Q2 2023 | Expense Ratio | Q2 2024 (Adjusted) | Q2 2023 (Adjusted) | Change (bps) | | :--- | :--- | :--- | :--- | | Compensation Expense Ratio | 60.9% | 59.5% | +140 bps | | Operating Expense Ratio | 18.5% | 21.2% | -270 bps | [Risk Management Segment Profitability Analysis](index=6&type=section&id=Risk%20Management%20Segment%20Profitability%20Analysis) The segment's profitability improved in Q2 2024, with adjusted EBITDAC increasing to $73.9 million from $61.6 million in Q2 2023, and the adjusted EBITDAC margin expanded by 120 basis points to 20.6% from 19.4% a year ago Risk Management Segment Net Earnings to Adjusted EBITDAC (in millions) | Metric | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | Net earnings, as reported | $47.8 | $36.7 | | **EBITDAC, as adjusted** | **$73.9** | **$61.6** | | Net earnings margin, as reported | 13.3% | 11.5% | | **EBITDAC margin, as adjusted** | **20.6%** | **19.4%** | [Corporate Segment](index=7&type=section&id=Corporate%20Segment) The Corporate segment recorded an adjusted pretax loss of $143.3 million in Q2 2024, widening from a loss of $133.6 million in Q2 2023, with the increased loss primarily attributable to higher interest and banking costs, which rose to $95.0 million from $78.5 million, following debt issuances in late 2023 and early 2024 Corporate Segment Pretax Loss Components - Q2 2024 vs Q2 2023 (in millions) | Component | Q2 2024 (Adjusted) | Q2 2023 (Adjusted) | | :--- | :--- | :--- | | Interest and banking costs | $(95.0) | $(78.5) | | Clean energy related | $(2.2) | $(3.2) | | Acquisition costs | $(4.5) | $(3.7) | | Corporate | $(41.6) | $(48.2) | | **Adjusted Pretax Loss** | **$(143.3)** | **$(133.6)** | - Interest and banking costs were higher in Q2 2024 compared to Q2 2023 primarily due to debt issuances that occurred in the fourth quarter of 2023 and the first quarter of 2024[22](index=22&type=chunk) - As of June 30, 2024, Gallagher's total debt included **$4.55 billion** from public debt, **$3.52 billion** from private placements, and **$80.0 million** from its line of credit facility[22](index=22&type=chunk) Consolidated Financial Statements [Consolidated Statement of Earnings](index=12&type=section&id=Consolidated%20Statement%20of%20Earnings) For the second quarter of 2024, Arthur J. Gallagher & Co. reported total revenues of $2.78 billion and net earnings of $285.4 million, resulting in diluted net earnings per share of $1.27, a notable increase from $1.07 in the same quarter of the previous year, and the company also increased its dividend declared per share to $0.60 from $0.55 Total Company Statement of Earnings Highlights - Q2 2024 vs Q2 2023 (in millions) | Metric | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | Revenues before reimbursements | $2,736.0 | $2,406.9 | | Total revenues | $2,775.4 | $2,441.9 | | Earnings before income taxes | $365.6 | $297.4 | | Net earnings | $285.4 | $235.8 | | Diluted net earnings per share | $1.27 | $1.07 | [Consolidated Balance Sheet](index=14&type=section&id=Consolidated%20Balance%20Sheet) As of June 30, 2024, the company's balance sheet showed total assets of $63.0 billion, a significant increase from $51.6 billion at the end of 2023, largely driven by a rise in fiduciary assets, with total liabilities also growing to $51.4 billion from $40.8 billion, and total stockholders' equity increasing to $11.6 billion Key Balance Sheet Items (in millions) | Account | June 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $1,415.3 | $971.5 | | Goodwill | $11,915.5 | $11,475.6 | | Total assets | $63,007.7 | $51,615.8 | | Corporate related borrowings (current + noncurrent) | $8,070.9 | $7,676.0 | | Total liabilities | $51,408.4 | $40,800.5 | | Total stockholders' equity | $11,599.3 | $10,815.3 | Supplementary Information [Reconciliation of Non-GAAP Measures](index=15&type=section&id=Reconciliation%20of%20Non-GAAP%20Measures) The report provides detailed reconciliations of reported GAAP results to adjusted non-GAAP figures for both the second quarter and six-month periods of 2024 and 2023, with these tables breaking down adjustments for items such as net gains on divestitures, acquisition integration costs, workforce and lease termination charges, acquisition-related adjustments, and amortization of intangible assets for each operating segment - Detailed reconciliations are provided to bridge the gap between GAAP 'Earnings Before Income Taxes' and 'Net Earnings' to their respective adjusted (non-GAAP) figures for the Brokerage, Risk Management, and Corporate segments[50](index=50&type=chunk)[52](index=52&type=chunk) [Information Regarding Non-GAAP Measures](index=9&type=section&id=Information%20Regarding%20Non-GAAP%20Measures) The company utilizes several non-GAAP financial measures, including EBITDAC, adjusted EBITDAC, adjusted EPS, and organic revenue, which management believes offer a clearer view of the company's operational performance and financial trends by excluding items that can have a high degree of variability, such as acquisition-related costs and amortization of intangibles, and these measures are used internally for performance evaluation and are considered useful for investors - Management uses non-GAAP measures to provide useful information to investors regarding financial and business trends related to the company's results of operations and financial condition[33](index=33&type=chunk) - Key non-GAAP adjustments include the exclusion of net gains/losses on divestitures, acquisition integration costs, workforce and lease termination charges, amortization of intangible assets, and the impact of foreign currency translation[37](index=37&type=chunk) - Organic revenue is a key non-GAAP measure that excludes the first twelve months of revenues from acquisitions and revenues from divested operations to help analyze growth from ongoing operations[38](index=38&type=chunk) [Other Information](index=14&type=section&id=Other%20Information) For the second quarter of 2024, the diluted weighted average shares outstanding were 222.9 million, and the company's total workforce expanded to 53,899 employees as of June 30, 2024, up from 48,441 in the prior year, reflecting both organic growth and acquisitions Share Count and Workforce Data | Metric | As of June 30, 2024 | As of June 30, 2023 | | :--- | :--- | :--- | | Diluted weighted average shares outstanding (Q2, 000s) | 222,854 | 219,049 | | Total Company Workforce | 53,899 | 48,441 | [Forward-Looking Statements](index=9&type=section&id=Forward-Looking%20Statements) This section provides a standard safe harbor statement, cautioning that the press release contains forward-looking statements regarding future performance and results, and lists several important factors that could cause actual results to differ materially, including global economic events, acquisition-related risks, cybersecurity threats, competition for talent, and changes in the insurance market - The report includes forward-looking statements identified by words like "anticipates," "believes," and "expects," which are not guarantees of future performance[29](index=29&type=chunk) - Key risks that could impact future results include global economic and geopolitical events, acquisition integration challenges, cybersecurity risks, competition for talent, and changes in insurance premium rates[31](index=31&type=chunk)

ROLLING MEADOWS, Ill., July 25, 2024 /PRNewswire/ -- Arthur J. Gallagher & Co. (NYSE: AJG) today reported its financial results for the quarter ended June 30, 2024.  Management will host a webcast conference call to discuss these results on Thursday, July 25, 2024 at 5:15 p.m. ET/4:15 p.m. CT.  To listen to the call, and for printer-friendly formats of this release and the "CFO Commentary" and "Supplemental Quarterly Data," which may also be referenced during the call, please visit ajg.com/IR.  These docume ...

ROLLING MEADOWS, Ill., July 24, 2024 /PRNewswire/ -- Arthur J. Gallagher & Co. (NYSE: AJG) today declared a regular quarterly cash dividend of sixty cents ($0.60) per share on the Common Stock of the Company, payable on September 20, 2024 to Stockholders of Record as of September 6, 2024.Arthur J. Gallagher & Co. (NYSE: AJG), a global insurance brokerage, risk management and consulting services firm, is headquartered in Rolling Meadows, Illinois.  Gallagher provides these services in approximately 130 count ...