Aon Q2 Profit Climbs, Beats Estimates; Revenue Misses View

(RTTNews) - UK-based risk and insurance brokerage service provider Aon Plc (AON) reported Friday higher profit in its second quarter with a slight increase in revenues. Adjusted earnings per share topped analysts' estimates, while top line missed their view.

President and Chief Executive Officer Greg Case said, "Our second quarter results reflect strong earnings per share growth of 13 percent, including organic growth in each segment, underlying operational improvement and effective capital management, despite challenges from both foreign currency translation and market impact."

For the second quarter, Aon's net income attributable to shareholders climbed 26 percent to $304 million from $241 million in the prior-year quarter. Earnings per share grew 33 percent to $1.01 from $0.76 last year.

Adjusting for certain items, quarterly net income per share attributable to Aon shareholders totaled $1.25, versus $1.11 a year ago. The latest results included a $0.03 per share unfavorable currency impact.

On average, 23 analysts polled by Thomson Reuters expected the company to report earnings per share of $1.20 for the quarter. Analysts' estimates typically exclude one-time items.

Operating profit for the quarter improved 16 percent year-over-year to $445 million, with a 2 percent increase in total operating expenses to $2.5 billion.

Operating margin, adjusted for certain items, decreased 30 basis points to 18.2 percent.

Total revenue for the tri-monthly period rose 1 percent to $2.919 billion, from $2.897 billion last year. Analysts' revenue consensus was $2.97 billion for the quarter. For the quarter, organic revenue growth of 2 percent was partially offset by a 1 percent unfavorable impact from acquisitions, the company noted.

Total Risk Solutions revenues were $1.948 billion, slightly higher than last year. One percent growth in retail revenues were offset by 4 percent drop in reinsurance revenues. Retail organic revenue increased 2 percent reflecting revenue growth in both the Americas and International businesses.

HR Solutions total revenue increased 3 percent, driven by 2 percent organic growth in commissions and fees and a 1 percent favorable impact from foreign currency translation.

Looking forward, Case said the company is well on track to deliver continued organic growth across each segment and operational improvement through returns on investments in GRIP and healthcare exchanges.

On the NYSE, Aon shares lost $0.11 or 0.12 percent on Thursday, settling at $90.97.