Hub Sees 8% Increase In 1st Quarter Earnings
By Mark E. Ruquet
NU Online News Service, April 28, 2:21 p.m. EDT?Hub International Limited reported first-quarter net income rose to $9.6 million, or 29 cents a share, compared with $8.9 million, or 28 cents a share, for the 2003 period.
The Chicago-based broker reported revenues increased 15 percent, or $10 million, going from $69 million to $79 million, and an 8 percent first-quarter increase in its earnings per share with increases in both commissions and contingent commissions.
The firm reported that commission income grew 13 percent to $62 million from $55 million. Contingency fees rose 21 percent to $15 million from $12 million. Risk management services, investment income and other items grew 37 percent to less than $3 million from $2 million.
The results include a $2.6 million pretax write-off to adopt the Hub name for most of its operating units and phase out the use of prior trade names.
During an investor analyst's conference call today, Martin P. Hughes, chairman and chief executive officer, said, "We are off to a good start and are pleased with our performance."
He said the firm is keeping its earning guidance for the year ranging from $1.13 to $1.17 a share. He added that it is too early in the year to make any adjustments in the guidance at this time.
"We want to see how the second quarter unfolds before commenting on the guidance for the rest of the year," Mr. Hughes added.
Discussing a subpoena from the New York attorney general's office for information regarding contingency fees paid to Hub's subsidiary, Kaye Group, by insurers, Mr. Hughes said the firm has never hidden contingency fees and "never been shy about disclosing it." He said the firm is extending its "full cooperation to the attorney general's office."
Kaye is one of four broker's that have announced they have been subpoenaed in an inquiry that followed complaints by a public interest group that brokers accepting the fees did not represent their customers' best interests.
In response to a question about the nature of the investigation, Bruce D. Guthart, Hub's chief operating officer, said the attorney general's office has asked for a long list of information and the nature of that list, "we presume," is no different from what has been asked of other brokers.
"The good news is that we have all the information the attorney general has requested and we are putting it all together," said Mr. Hughes.
Hub also declared a quarterly dividend of 5 cents a share payable on June 30 to shareholders of record as of June 15.
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