Posted on 05 Feb 2010
Insurance broker Aon Corp. announced its fourth-quarter profits and also approved the repurchase of $2 billion in shares.
The authorization would buy about 51.5 million shares based on yesterday's $38.81 closing price, or about 18 percent of the average 287.8 million shares outstanding in the fourth quarter. The repurchases under the new program will begin when the company buys back the $265 million remaining under a program it began in 2005, Chief Financial Officer Christa Davies said in a conference call with analysts and investors today.
Aon, which earns commissions by matching buyers and sellers of insurance, is adding to sales with the purchase of Carpenter Moore Insurance Services, announced in October, and the 2008 acquisition of reinsurance broker Benfield Group Ltd. for about $1.4 billion. Net income of $198 million compares with a loss of $6 million in the year-earlier period, the Chicago-based broker said today in a statement.
The broker’s board of directors approved the buyback"“given our belief in the underlying strength of the business," Davies said. Aon repurchased 8.6 million shares for $340 million in the fourth quarter, Davies said.
Brokerage revenue advanced 8 percent in the fourth quarter to $1.7 billion. So-called organic revenue, which excludes gains from acquisitions and currency fluctuation, slipped 1 percent. Organic revenue in the U.K. declined 9 percent on “weak economic conditions,” the company said.
Davies said a restructuring plan announced in 2007 will save the brokerage $536 million in 2010, $69 million more than the company projected.