Aon Earnings Cheat Sheet: Missed Profit Estimate As Sales Drop

Falling revenue did not prevent S&P 500 (NYSE:SPY) component Aon Corporation (NYSE:AON) from reporting a profit boost in the first quarter. Aon Corp provides risk management and human capital consulting services, including insurance and reinsurance brokerage and workforce productivity solutions.

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Aon Earnings Cheat Sheet for the First Quarter

Results: Net income for the insurance broker rose to $246 million (71 cents/share) vs. $178 million (63 cents/share) in the same quarter a year earlier. A rise of 38.2% from the year earlier quarter.

Revenue: Fell 13.7% to $1.65 billion YoY.

Actual vs. Wall St. Expectations: AON fell short of the mean analyst estimate of 80 cents/share. Estimates ranged from 75 cents per share to 85 cents per share.

Quoting Management: “We delivered solid organic revenue growth in our Retail Brokerage and Consulting Services businesses while delivering on the synergy savings related to Aon Hewitt,” said Greg Case, president and chief executive officer. “We are firmly on track to deliver growth in both of our segments in 2011, our restructuring programs are delivering cost savings and we have solid financial flexibility. While macro conditions remain challenging globally, we are optimistic about the underlying strength of our business as highlighted by the repurchase of $350 million of common stock in the quarter.”

Key Stats: The company has now seen net income rise in three-straight quarters. In the fourth quarter of the last fiscal year, net income rose 16.7% and in the third quarter of the last fiscal year, the figure rose 20%.

Competitors to Watch: Arthur J. Gallagher & Co. (NYSE:AJG), Brown & Brown, Inc. (NYSE:BRO), Marsh & McLennan Companies, Inc. (NYSE:MMC), Willis Group Holdings PLC (NYSE:WSH), CNinsure Inc. (NASDAQ:CISG), Fortegra Financial Corp (NYSE:FRF), InsWeb Corporation (NASDAQ:INSW), eHealth, Inc. (NASDAQ:EHTH), American International Group (NYSE:AIG), Metlife (NYSE:MET), Chubb (NYSE:CB), Traveler’s (NYSE:TRV) Hartford Financial (NYSE:HIG) and Life Exchange, Inc. (LFXG).

Today’s Performance: Shares of AON are trading at $52.31 as of April 29, 2011 at 11:15 AM ET, down from the previous close.


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