What led to the stock pressure: Brown & Brown, Inc. (NYSE: BRO) stock lost over 4.3% on January 30th, 2019 (Source: Google finance) after the company posted mixed results for the fourth quarter of FY 18. Net income fell 60.8% to $73.5 million. Organic Revenue fell by 2.1%, each as compared to the fourth quarter of the prior year. Organic Revenue for the fourth quarter of 2018 was negatively impacted by the significant claims processing revenue we recognized in the fourth quarter of 2017 associated with weather-related events.
BRO in the fourth quarter of FY 18 has reported the adjusted earnings per share of 26 cents, missing the analysts’ estimates for the adjusted earnings per share of 27 cents. The company had reported the adjusted revenue growth of 7.3 percent to $508.7 million in the fourth quarter of FY 18
Acquisition synergies: BRO has recently announced that Hull & Company, LLC, a subsidiary of Brown & Brown, Inc., has acquired substantially all the assets of Izzo Insurance Services. The company has annual revenues of approximately $2,000,000. Following the acquisition, Izzo Insurance Services will continue doing business from its existing Bloomingdale, Illinois location under the leadership of Karen Izzo. During the quarter, the company has completed the previously announced acquisition of Hays Companies by Brown & Brown, Inc.
On the other hand, J. Scott Penny, Chief Acquisitions Officer of Brown & Brown, Inc., and Tony Fincannon and Rick Messinger, the principals of Dealer Associates, Inc., had announced that Brown & Brown of Kentucky, Inc., a subsidiary of Brown & Brown, Inc., has acquired substantially all of the assets of DAI. “DAI has been an industry leader in F&I Income Development since inception, and Tony is a recognized industry leader on dealer reinsurance and other participation structures designed to maximize profit and performance. Further, J. Scott Penny, Chief Acquisitions Officer of Brown & Brown, Inc., and Andrew S. Altman, Jeffrey R. Grosser, James N. Rodman, James D. Stoller, and Evan M. Tobasky, the shareholders of Rodman Insurance Agency, Inc., had announced that Brown & Brown of Massachusetts, LLC has acquired substantially all of the assets of Rodman Insurance Agency.
BRO has declared a regular quarterly cash dividend of $0.08 per share. The dividend is payable on February 20, 2019 to shareholders of record on February 6, 2019. The company has entered into an accelerated share repurchase program (ASR) with Royal Bank of Canada for $100 million of the Company’s common stock. The ASR is part of the Company’s board-approved $400 million share repurchase authorization announced on July 20, 2015.