Posted on 07 Feb 2011
Aon Corp.'s fourth-quarter profit rose 17% as charges weighed less heavily on the bottom line and revenue surged on the insurance broker's acquisition of Hewitt Associates.
Aon has seen core earnings decline in recent quarters. Meanwhile, price declines have continued to weigh on the broader commercial insurance industry.
It's in the midst of integrating Hewitt, which it acquired in October in a cash-and-stock deal that had been valued at $4.9 billion. The purchase nearly tripled the size of Aon's human-resources operations and gave it a business to rival competing brokerage Marsh & McLennan Inc.'s Mercer and Oliver Wyman units.
Aon's profit rose to $231 million from $198 million a year earlier but fell to 67 cents from 69 cents on a per-share basis as the number of shares outstanding rose 20%. Excluding items such as restructuring charges, earnings from continuing operations fell to 84 cents from 96 cents. Revenue jumped 40% to $2.91 billion, boosted by the Hewitt acquisition.
At the risk solutions segment, operating profit jumped 93% amid a sharp drop in restructuring charges as revenue increased 4%. The HR solution business's earnings climbed 46% as revenue more than tripled on the acquisition.