Broking giant beats most analysts' expectations despite profit fall
Aon’s third quarter profits dropped by 43% as it became the latest broker to suffer a slowing world economy.
Net income decreased 43% to $117 million or $0.40 per share, compared to $204 million or $0.64 per share for the prior year quarter, including the impact of businesses moved to discontinued operations.
However, earnings per share increased 33% to 69 cents, beating most analysts’ expectations.
Net income from continuing operations increased 18% to $153 million or $0.52 per share, compared to $130 million or $0.41 per share for the prior year quarter.
President Greg Case said Aon had beaten its key perfomance indicators, adding: “These results were achieved despite soft market conditions globally and unprecedented turmoil in the insurance industry.”
UK fees and commissions suffered a slight drop in comparison to last year’s third quarter, down from $193m to $182m.
For the nine month year, Aon increased UK fees from $545 to $546m compared to last year.
The US giant shook up the world of consolidation earlier in the year when agreed to buy London-based Benfield for $844m, taking on $91m of debt.
“We are pleased to deliver results that demonstrate continued progress in each of our key metrics: organic growth was two percent, adjusted pre-tax margin increased 140 basis points and adjusted earnings per share from continuing operations increased 33%,” Case said.
“"Driven by a commitment to expense discipline, we increased savings related to our 2007 restructuring program by $60 million, enabling further investment in our industry-leading platform and concurrent margin improvement.
“Additionally, our balance sheet provides solid financial flexibility as we continue to make strategic investments including the acquisition of Benfield, while streamlining our core focus with the announced sale of AIS and returning more than $400million of excess capital to shareholders.”
