For the nine months, total revenues rose 12.0% to $1.25 billion compared with the same period in 2006, the Itasca, Ill.-based brokerage said late Tuesday. Revenues from its brokerage and risk management units rose 9.0% during the period to $1.18 billion. Profits for the nine months rose 11.1% to $115.4 million, the brokerage said.
Analyst David Small in a note to investors said Gallagher’s brokerage division “disappointed” as organic growth was “nonexistent” and margins were lower. He stated that “disappointing” margins in Gallagher’s risk management division drove lower pretax margins but was “almost fully offset” by a lower-than-expected tax rate.
J. Patrick Gallagher Jr., the brokerage’s chairman, president and chief executive officer, blamed the softening insurance marketplace, which he said “accelerated” in the third quarter, for the lack of growth in its brokerage segment.
“Partially offsetting the pricing slide is our acquisition program, where we continue to see substantial opportunities,” Mr. Gallagher said. Through Sept. 30, Gallagher completed 13 acquisitions.