Posted on 30 Jul 2010
Aon Corp.'s second-quarter earnings rose 2.7% as its insurance brokerage and consulting units each saw higher profit amid rising margins.
The insurance broker has seen commissions and fee revenue rise recently, though its risk and insurance-brokerage services--its biggest unit--had had its profit decline amid higher expenses. Price competition has weighed on the industry's profits as insurers price policies low enough to attract customers less worried about risk.
Aon agreed earlier this month to buy human-resources firm Hewitt Associates Inc. (HEW) for about $4.9 billion, tripling the size of its own consulting operations and presenting a challenge to rival Marsh & McLennan Cos. (MMC).
Aon posted a profit of $153 million, or 54 cents a share, up from $149 million, or 51 cents a share, a year earlier. Excluding restructuring and pension impacts, among others, earnings from continuing operations rose to 81 cents from 71 cents as revenue edged up 0.9% to $1.9 billion.
Analysts polled by Thomson Reuters most recently forecast earnings of 75 cents on $1.87 billion in revenue.
At the risk and brokerage services unit, operating profit jumped 52% as operating margin widened to 19.2% from 12.7%. Revenue rose 1%, though organic revenue--which excludes acquisitions, divestitures and currency fluctuations--dropped 1%.
Consulting earnings rose 9.8% as revenue rose 5.7% on a 2% organic increase in commissions and fees.