Posted on 30 Apr 2010
Aon Corp.'s first-quarter earnings declined 36% on $126 million in year-earlier tax gains, though the insurance broker's adjusted earnings rose and topped analysts' estimates.
President and Chief Executive Greg Case said the results "reflect solid operational performance" across the company's two business segments despite "difficult economy and soft market conditions and a 48% decline in investment income on an adjusted basis."
Aon, one of the biggest insurance brokerages by revenue, has seen commissions and fee revenue rise recently, though its biggest unit—risk and insurance brokerage services—has seen profit decline amid rising compensation and benefits costs. The insurance industry has seen price competition weigh on companies' bottom lines as they have priced policies low enough to attract customers less worried about risk.
Aon reported a profit of $178 million, or 63 cents a share, down from $280 million, or 96 cents, a year earlier. On an adjusted basis, earnings from continuing operations rose to 83 cents from 75 cents as revenue increased 3.1% to $1.9 billion.
Analysts polled by Thomson Reuters had most recently forecast earnings of 81 cents on $1.88 billion in revenue.
At the risk and brokerage-services unit, profit declined 20% on increased expenses while revenue rose 2.9%.