Arthur J. Gallagher & Co. reported a 17 percent rise in net income for the first quarter, but the increase was not enough to meet analysts' estimates.
The Itasca, Ill.-based brokerage reported first-quarter net income of $19.8 million, or 20 cents per share, compared with $17.1 million, or 17 cents per share in the first quarter last year.
Bear Stearns analyst David Small said the earnings figure missed his estimate by 11 cents and consensus by 6 cents.
“Similar to trends we have seen in other brokers this quarter, organic growth decelerated to 1 percent, down from 4 percent in the fourth quarter of last year and 5 percent in the third quarter,” he wrote.
But with a soft market, many small private brokers are looking to exit the field and Gallagher has been able to capitalize on that with acquisitions, Mr. Small said.
On a more positive note, risk management business bounced back in the quarter following the company's acquisition of new business.
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