General Insurance Article - Aon Q4 profit beats estimates, revenue short of expectations


UK-based risk and insurance brokerage service provider Aon Plc. (AON) Friday said fourth-quarter profit increased from the previous year, driven by higher revenues in both its segments. Adjusted earnings topped Wall Street estimates, while revenues fell shy of expectations.

 Greg Case, President and CEO, said,
 "We delivered twenty-three percent earnings growth in the fourth quarter driven by organic revenue growth and strong operating margin improvement in both segments, a lower effective tax rate and effective capital management. Results reflect a strong finish to 2014..."
  
 Net income attributable to shareholders grew to $459 million or $1.56 per share from $355 million or $1.44 per share in the comparable quarter last year.
  
 Adjusted earnings were $1.89 per share, while it totaled $1.54 per share a year earlier. On average, twenty-four analysts polled by Thomson-Reuters estimated earnings to be $1.86. Analysts' estimates typically exclude one-time items.
  
 Revenues rose 3 percent to $3.30 billion from $3.21 billion last year, driven primarily by 6 percent organic revenue growth, partially offset by a 3 percent unfavorable impact from foreign currency translation. Analysts expected revenue of $3.35 billion.
  
 In the Risk Solutions business, total revenue was fractionally higher, amid a 3 percent organic growth in commissions and fees and a 1 percent rise in commissions and fees resulting from acquisitions, net of divestitures.
  
 HR Solutions' revenue increased 8 percent to $1.3 billion owing to a 10 percent organic growth in commissions and fees.
  
 Operating expenses slid 1 percent to $2.7 billion due primarily to a favorable impact from foreign currency translation, decreases in formal restructuring costs and intangible asset amortization.
  
 The stock closed up 0.6 percent on Thursday at $93.72.

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