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Mar 31, 2020
Arthur J. Gallagher Q1 2020 Earnings Report
Arthur J. Gallagher reported first quarter results, showing resilience despite the economic impact of COVID-19 and strategic expense management.
Key Takeaways
Arthur J. Gallagher & Co. announced its first quarter 2020 financial results, demonstrating a solid financial and operational condition despite the economic challenges posed by COVID-19. The company reported revenue of $1,829.2 million and earnings per share of $1.79.
Brokerage and Risk Management revenues grew both organically and through mergers and acquisitions.
Company optimized its workforce and utilized centers of excellence to improve productivity.
Expense-base adjustments are being implemented to mitigate the impact of deteriorating economic conditions.
Insurance premium rates continue to increase mid-to-high single digits.
Revenue by Segment
Forward Guidance
While the company is encouraged by the business's resilience in April, they are balancing that with the expectation that deteriorating economic conditions will likely impact future financial performance, leading to expense-base adjustments.
Positive Outlook
- Our teams have not missed a step; all the while placing health and safety first.
- We are servicing our clients, we are selling new business, we continue to look at merger and acquisition opportunities
- Our bedrock culture keeps our teams working together in these challenging times.
- We continued our disciplined processes to optimize our workforce and utilize our centers of excellence, and we improved productivity and raised our quality.
- Our first quarter financial results reflect our best estimate of the accounting impact of the COVID-19 crisis, but still show our solid financial and operational condition and we have ample liquidity.
Challenges Ahead
- Deteriorating economic conditions will likely impact our future financial performance.
- We are taking appropriate measures to make expense-base adjustments in a staged, contemplative manner over the coming months.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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