Risk and insurance brokerage service provider Aon Corp. (AON: Quote) reported Friday a 3 percent decline in first-quarter profit, reflecting unfavorable foreign currency movement and investments. Adjusted earnings decreased and missed analysts expectations, while top line results were up 3 percent and matched view.
Greg Case, president and chief executive officer of the company said, "Our first quarter results reflect the strongest rate of organic revenue growth since the second quarter of 2007 despite overall results that were unfavorably impacted by foreign currency movement and investments to strengthen our client-serving capabilities."
Aon's main business, the risk solutions, reported revenues of $1.9 billion, up 3 percent from last year, with organic revenue growth of 4 percent. HR Solutions revenues increased 3 percent to $945 million.
Subsequent to the close of the first quarter, the company completed its change in corporate domicile of the parent company of the Aon group of companies from Delaware to the U.K. In addition, the board authorized a $5 billion share repurchase program and a 5 percent increase to the annual cash dividend.
In the first quarter, net income attributable to Aon stockholders declined to $238 million from $246 million reported last year. On a per share basis, earnings remained unchanged at $0.71.
Adjusted for certain items, earnings per share were $0.98, lower than $0.99 per share in the prior-year quarter. On average, 12 analysts polled by Thomson Reuters expected earnings per share of $1.06 for the quarter. Analysts' estimates typically exclude one-time items.
Total revenues for the quarter grew to $2.84 billion from $2.76 billion in the same quarter last year, that also matched analysts' consensus estimates. Revenue growth was driven by a 4 percent increase in organic revenue, partially offset by a 1 percent decrease from unfavorable foreign currency translation, the company said.
Total operating expenses increased 3 percent to $2.4 billion. Adjusted operating margin was 18.6 percent, lower than 19.4 percent in the preceding year.
During the quarter, the company repurchased 2.1 million shares of common stock for about $100 million.
Subsequent to the close of the first quarter, Aon Plc's board authorized a $5 billion share repurchase program that replaces and cancels the $2 billion share repurchase program previously authorized by Aon Corp.'s board in January 2010, which had about $1.1 billion of remaining authorization.
AON closed Thursday's regular trading at $51.35 on the NYSE.
| || |
| To receive FREE breaking news email alerts for Aon Corp and others in your portfolio|
by RTT Staff Writer
For comments and feedback: email@example.com