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Aon 2nd Quarter Net Down 4.7% on Higher Costs

Source: Dow Jones

Posted on 30 Jul 2012 by Neilson

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AonAon PLC's second-quarter earnings fell 4.7% as the insurance brokerage reported a lower profit in its human resources segment and higher operating expenses.

The company has improved revenue in recent quarters as results benefit from its $4.9 billion acquisition of human resources firm Hewitt Associates. Friday, the company reported its human resources unit reported a revenue increase of 2.8%, though its operating profit dropped 39%.

Aon reported earnings of $246 million, or 73 cents a share, down from year-ago earnings of $258 million, or 75 cents a share. Excluding special items such as restructuring charges and intangible asset amortization, per-share earnings were $1.02 from $1.03. Aon noted the foreign currency exchange rates hurt adjusted results by 3 cents per share.

Total revenue edged up 0.4% to $2.82 billion as an increase in organic revenue and commission and fees from acquisitions were offset by unfavorable currency translations and a decline in investment income.

Analysts surveyed by Thomson Reuters recently expected earnings of $1.01 on revenue of $2.89 billion.

Operating expenses increased 2.36%.

The risk solutions segment saw revenue decrease 0.7% to $1.9 billion in the latest quarter, while the segment's operating profit improved 1.6%.