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Brown & Brown 2Q Up 1.3% On Lower Expenses, Tops Street

Source: WSJ

Posted on 20 Jul 2010

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Brown & Brown Inc. (BRO) second-quarter earnings rose 1.3% on lower expenses as the insurance agency and brokerage firm reported results that topped Wall Street's expectations.

The company has continued to forge ahead in its strategy to use record-high levels of cash to acquire, taking over Commonwealth Insurance at the start of this month. At the end of the quarter, it had $293 million in cash, up 28% from the previous quarter.

Brown & Brown's brokerage arm helped anchor it though an unsteady insurance market pressured by investment losses and low rates. It has been benefiting lately from lower expenses.

On Monday, President and Chief Executive J. Powell Brown said exposure units and insurance premium rates remain "soft," with no significant changes seen in the foreseeable future.

Brown & Brown reported a profit of $41.2 million, or 29 a share, from $40.7 million, or 29 cents a share, a year earlier. The total shares outstanding was 1.3% higher than a year ago. Revenue decreased 1.1% to $243.7 million.

Analysts surveyed by Thomson Reuters expected earnings of 26 cents on revenue of $234 million.

Commissions and fees revenue, which makes up a bulk of the company's business, slid 1.5%. Total expenses slid 2.1%.