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Aon Third Quarter Earnings
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AON
Aon (NYSE:AON) announced its results for the third quarter on October 26, 2012. Aon provides risk management and human capital consulting services, including insurance and reinsurance brokerage and workforce productivity solutions.
A business' earnings are the main determinant of its share price because earnings and the circumstances relating to them can indicate whether the business will be profitable and successful in the long run. SEE: 12 Things You Need To Know About Financial Statements
The Numbers: Aon posted an EPS above analyst expectations, despite revenues falling short of predictions. The company reported adjusted net income of 95 cents per share versus the 89 cents per share estimate and revenues of $2.74 billion versus the $2.89 billion estimate. Revenue climbed 0.3% from the same period last year. Aon's revenue has grown during each of the past four quarters on a year-over-year basis. For the third quarter, the company reported net income of $204 million, up 3% from the year-ago quarter. Last quarter's profit boost ends a two-quarter streak of year-over-year profit decreases.
Management Quote: "Our third quarter results, led by strong operating performance in HR Solutions, reflect solid progress against each of our three key metrics including four percent organic revenue growth, thirty basis points margin improvement and eight percent earnings growth," said Greg Case, president and chief executive officer. "As we invest heavily in long-term growth opportunities such as our GRIP platform and healthcare exchanges to empower results for clients, we are delivering savings from our restructuring programs, generating strong free cash flow and effectively allocating capital, as highlighted by the repurchase of $275 million of ordinary shares in the quarter."
A Look Back: Net income has increased 10.5% year-over-year on average across the last five quarters. The biggest gain came in the third quarter of the last fiscal year, when income climbed 37.5% from the year-earlier quarter.
Looking Ahead: Expectations for the company's next-quarter performance are higher than they were 90 days ago. Over the past three months, the average estimate for the fourth quarter has risen to $1.27 per share from $1.25. Increasing earnings estimate is a positive sign about the company and it typically leads a increase in the stock price. Over the past 60 days, the average estimate for the fiscal year has reached $4.16 per share, a decline from $4.17.
A business' earnings are the main determinant of its share price because earnings and the circumstances relating to them can indicate whether the business will be profitable and successful in the long run. SEE: 12 Things You Need To Know About Financial Statements
The Numbers: Aon posted an EPS above analyst expectations, despite revenues falling short of predictions. The company reported adjusted net income of 95 cents per share versus the 89 cents per share estimate and revenues of $2.74 billion versus the $2.89 billion estimate. Revenue climbed 0.3% from the same period last year. Aon's revenue has grown during each of the past four quarters on a year-over-year basis. For the third quarter, the company reported net income of $204 million, up 3% from the year-ago quarter. Last quarter's profit boost ends a two-quarter streak of year-over-year profit decreases.
Management Quote: "Our third quarter results, led by strong operating performance in HR Solutions, reflect solid progress against each of our three key metrics including four percent organic revenue growth, thirty basis points margin improvement and eight percent earnings growth," said Greg Case, president and chief executive officer. "As we invest heavily in long-term growth opportunities such as our GRIP platform and healthcare exchanges to empower results for clients, we are delivering savings from our restructuring programs, generating strong free cash flow and effectively allocating capital, as highlighted by the repurchase of $275 million of ordinary shares in the quarter."
A Look Back: Net income has increased 10.5% year-over-year on average across the last five quarters. The biggest gain came in the third quarter of the last fiscal year, when income climbed 37.5% from the year-earlier quarter.
Looking Ahead: Expectations for the company's next-quarter performance are higher than they were 90 days ago. Over the past three months, the average estimate for the fourth quarter has risen to $1.27 per share from $1.25. Increasing earnings estimate is a positive sign about the company and it typically leads a increase in the stock price. Over the past 60 days, the average estimate for the fiscal year has reached $4.16 per share, a decline from $4.17.
by
Investopedia Staff
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