Gallagher reports revenue increase for fourth quarterReprints
Arthur J. Gallagher & Co. reported higher fourth-quarter 2016 revenue through a combination of organic growth and growth by acquisition, although the brokerage did see a slight slowdown in deals in the second half of the 2016 as sellers anticipated lower taxes this year.
The brokerage reported fourth-quarter 2016 revenue of $1.39 billion, a 3.8% increase over the same period in 2015. Gallagher’s principal brokerage unit reported revenue of $885.7 million, a 4% increase over the prior-year period.
For the full year, Gallagher reported $5.59 billion in 2016 total revenue, up 3.8% over 2015, and brokerage unit revenue of $3.53 billion, up 6.1%.
Net earnings for the fourth quarter of 2016 were $101 million, up 48% over the same period a year earlier. For the full year, 2016 net earnings were $445 million, up 14.4% compared with 2015.
The brokerage saw organic growth of 3.6% in the fourth quarter and the full year, said J. Patrick Gallagher Jr., chairman, president and CEO, in a conference call with analysts.
“Property/casualty rates continue to be a slight headwind, offset somewhat by exposure growth,” he said.
Looking forward, Gallagher expects similar organic growth in 2017, Mr. Gallagher said.
The brokerage completed nine acquisitions during the fourth quarter, representing about $40 million in annualized revenue, which is slightly lower than average for the period, Mr. Gallagher said. The slowdown is in part is due to several sellers wanting to put off closing deals until 2017 to take advantage of expected lower corporate taxes promised by President Donald Trump, he said.
Conversely, the brokerage has completed five acquisitions already in 2017 for about $32 million in revenue, which is above average, Mr. Gallagher said.