Arthur J. Gallagher & Co.'s (AJG) fourth-quarter earnings fell 12% on a year-earlier tax benefit though the insurance broker and risk-management firm posted stronger revenue.
The company extended its streak of acquisitions last year, with its brokerage segment completing 11 acquisitions in the latest period.
Analysts have anticipated that stronger pricing in the sector would lead to revenue growth for the industry. But according to Citi analysts, management's tone was measured at an investors meeting in December--with Chairman and Chief Executive Patrick Gallagher cautioning against getting too excited about a market turn despite pricing improvements in the industry.
Arthur J. Gallagher reported a profit of $40.5 milliion, or 35 cents a share, down from $54.7 million, or 51 cents a share, a year earlier. The latest period included 4 cents in charges. The prior year included a tax benefit of $20.2 million.
Revenue increased 26% to $578.4 million. Analysts polled by Thomson Reuters most recently projected earnings of 33 cents on revenue of $547 million.
At the brokerage segment, revenue grew 22% and earnings were up 17%, while risk-management revenue improved 13%, and adjusted income climbed 38%.