Brown & Brown ( BRO) advanced after the Daytona Beach, Fla.-based insurance broker posted a 20% increase in second-quarter profit and beat analyst expectations. The company earned $44.4 million, or 32 cents a share, compared with $37 million, or 27 cents a share, a year ago. Revenue totaled $220.8 million, up 12.7% from a year ago. Wall Street, according to Thomson Financial, was looking for earnings of 29 cents a share. Shares were most recently trading up $3.38, or 12.10%, to $31.32 recently.PS Business Parks ( PSB) gained after announcing that Standard & Poor's will add the Glendale, Calif.-based real estate investment trust to the S&P SmallCap 600. The REIT, which will be added to the index at the close of trading Thursday, will replace Diagnostic Products Corp. ( DP). Diagnostic Products is being acquired by Siemens AG in a deal expected to close on or about that date. Shares of PS Business Parks climbed $1.68, or 2.83%, to $61.07. Legg Mason ( LM) slipped after earnings fell short of Wall Street expectations for the asset-management firm's fiscal first quarter. Legg Mason's net income rose 38% to $156 million, or $1.08 a share, up from $112.8 million, or 93 cents a share. Revenue more than doubled to $1.04 billion, driven by the recent acquisitions of Citigroup's ( C) asset management unit and Permal Group. But Wall Street was looking for a better performance from the firm. The analyst consensus estimate had Legg Mason earning $1.13 a share on revenue of $1.08 billion. "This was a very difficult quarter for the markets, and particularly equity markets, and we were not immune to the effects of these market difficulties," said Chairman and Chief Executive Raymond Mason. Sure enough, assets under management at Legg Mason declined by 1.5% to $854.7 billion in the most recent quarter. Shares dropped $6.61, or 7.01%, to $87.72
Everest Re Group ( RE) advanced after the Bermuda-based reinsurance company said second-quarter income climbed 13.5%. The company reported net income of $220.4 million, or $3.38 a share, up from $194.2 million, or $3.40 a share, a year ago. After-tax operating income, which excludes capital gains and losses on investments totaled $218.7 million, or $3.35 a share, up 26.2% from a year ago. Wall Street was looking for the company to report income of $3.07 a share. Gross premium revenue was $910 million, down 17.9% from a year ago, which the company said reflected a worldwide reinsurance operation decline. But net investment income increased 11.6% to $153 million. "We expect new production opportunities to result in double digit growth in the second half of the year, with the fourth quarter being particularly strong," said Chairman and CEO Joseph V. Taranto. Shares gained $1.77, or 1.94%, to $92.90 recently. Waddell & Reed Financial ( WDR) gained even though the Overland Park, Kan.-based mutual fund manager posted a wider second-quarter loss. But much of the loss was due to a long awaited regulatory settlement, stemming from the firm's role in the three-year-old mutual fund trading scandal. In the quarter, the company lost $33 million, or 40 cents share, compared with a profit of $7.1 million, or 9 cents a share, a year ago. The second quarter included a pretax charge of $55 million to pay for the settlement with securities regulators. The firm announced the settlement on Monday. Waddell & Reed also took a second-quarter charge of $20 million to recognize the impairment of goodwill associated with a subsidiary, Austin Calvert & Flavin. Excluding nonrecurring charges, net income in the current quarter would have been $26.4 million, or 32 cents share. Wall Street was looking for earnings of 32 cents a share, excluding the charges. Total operating revenue increased 20% to $181.3 million. Shares gained $1.02, or 5%, to $21.42 recently.