NEW YORK (AP) -- Shares of Brown & Brown Inc. gained in trading Monday after the business insurance broker had reported fourth-quarter earnings that were better than generally expected.
THE SPARK: The Florida company late on Friday reported net income of $42.6 million, or 29 cents a share, up 17 percent from the October-December quarter in 2011. Revenue rose 24 percent to $302.8 million.
Analysts polled by FactSet had predicted profit of 27 cents a share on revenue of $285.7 million.
THE BIG PICTURE: Brown & Brown provides insurance for small- and mid-sized businesses. It also gets revenue from commissions paid by insurance companies.
THE ANALYSIS: Sterne Agee analysts Dan Farrell and Nitin Chhabra, in a weekend note, increased their estimates for Brown & Brown's earnings by 3 cents per share for both 2013 and 2014, to $1.46 per share this year and $1.74 per share next year. They have a "Buy" rating for the company, and raised their 12-month price target by $1 to $33.
They said they believe Brown & Brown will benefit from improved growth trends, while its balance sheet should allow it to buy other companies.
SHARE ACTION: Brown & Brown shares rose $1.52, or 5.5 percent, to $29.01 in early afternoon trading, peaking earlier Monday at $29.66. That's the stock's highest level since December 2006.