Insurance broker Arthur J. Gallagher & Co. (AJG) said Tuesday after the markets closed that its fourth quarter profit rose from last year, helped by higher revenue from its brokerage segment.
The Itasca, Illinois-based company reported net income of $16.8 million or $0.16 per share, compared to $4.7 million or $0.05 per share for the year-ago quarter.
Income from continuing operations for the fourth quarter was $19.4 million or $0.19 per share, compared to $11.7 million or $0.12 per share in the prior year quarter.
On average, 12 analyst polled by Thomson Reuters expected the company to earn $0.23 per share for the fourth quarter. Analysts' estimates typically exclude special items.
During fourth quarter, Gallagher recorded pretax charges of $11.8 million as a result of the completion of a previously announced plan to reduce, and the reorganization of, its middle and back office workforce by about 400 positions and from the termination of certain office leases.
Total revenue for the fourth quarter rose 5.6% to $435.1 million from $412.1 million in the same quarter last year. Twelve analysts had a consensus revenue estimate of $420.31 million for the fourth quarter.
The company's brokerage segment revenue increased 5.8% to $320.8 million in the fourth quarter, while its risk management segment revenue declined 0.6% to $114.2 million.
For the full year 2009, the company reported net income of $128.6 million or $1.28 per share, compared to $77.3 million or $0.82 per share for the full year 2008.
Income from continuing operations for the full year 2009 was $133.1 million or $1.32 per share, compared to $111.4 million or $1.18 per share in 2008.
Revenue for the full year 2009 increased 5% to $1.73 billion from $1.65 billion the prior year.
Analysts expected the company to earn $1.35 per share on revenue of $1.71 billion for the full year 2009.
"I'm extremely pleased with how well Gallagher executed in 2009 and you can see it in our results. For the year, adjusted EBITDAC was up 25.6% in our Brokerage segment and up 15.3% in our Risk Management segment. For the year, our Brokerage segment expanded its adjusted EBITDAC margins by 2.7 points and our Risk Management segment expanded its adjusted EBITDAC margins by 2.1 points. I believe this represents tremendous progress in an obviously difficult operating environment," said J. Patrick Gallagher Jr., Chairman, President and CEO.
Arthur J. Gallagher shares, which have traded in a range of $14.82 to $25.00 over the past year, closed Tuesday's regular trading session at $22.70, down 8 cents and lost an additional 5 cents in after hours trading.
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