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Jun 30, 2021
Arthur J. Gallagher Q2 2021 Earnings Report
Arthur J. Gallagher reported financial results for the quarter, showing revenue growth and improved margins.
Key Takeaways
Arthur J. Gallagher & Co. reported strong second-quarter results, driven by revenue growth in its core brokerage and risk management segments. The company's net earnings margin improved, and it completed several tuck-in mergers.
Core brokerage and risk management segments combined to post 17% growth in revenue.
Organic revenue growth was 8.6%.
Net earnings margin improved by 106 basis points.
Adjusted EBITDAC margins expanded by 30 basis points.
Revenue by Segment
Forward Guidance
The company expects to see incremental Brokerage segment costs again in the third and fourth quarters of 2021, relative to the same quarters in 2020.
Positive Outlook
- Nearly all of Brokerage segment operations’ revenues benefited from clients’ improving business conditions.
- Risk Management segment operations revenue benefited from clients’ improving business conditions.
- Clean energy investments benefited from higher electricity production due to increased demand for electricity.
- If economic conditions continue to improve, favorable revenue benefits in Brokerage and Risk Management segments and clean energy investments may continue.
- Global P/C rates remain firm overall, and the increases saw during the second quarter of 2021 were similar to the first quarter.
Challenges Ahead
- If economic recovery slows, favorable revenue and investment returns could soften from second quarter 2021 levels.
- Incremental Brokerage segment costs are expected to increase in third and fourth quarter 2021.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
Analyze how earnings announcements historically affect stock price performance
Avg. Return Before/After Earnings
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