Aon third quarter profits down 43%

by David Masters

Story link: Aon third quarter profits down 43%

Chicago-based insurance broker Aon Corp reported its third quarter results on Friday, with net income down 43% on year to $117 million, or $0.40 per diluted share.

Despite the fall in income, the results beat Wall Street’s expectations, and the share price of the world’s largest insurance brokerage jumped 11% to $42.30 following the announcement.

Net income from continuing operations increased to $153 million, or $0.52 per share, up from $130 million, $0.41 per share, in the same period last year.

Continuing operations figures exclude results from units Aon aims to discontinue or sell off, including soon-to-be-sold California-based Automobile Insurance Specialists and already-sold Combined Insurance Companies of America, and Sterling Life Insurance.

If certain unusual items are also excluded from the results, then net income from continuing operations is $0.69 per share, up from $0.52 in the year ago quarter.

This exceeds analyst expectations of $0.63 per share.

Total revenue increased 6% on year to $1.86 billion, up from $1.76 billion in the third quarter of 2007.

Aon receives most of its revenue from fees collected helping corporate clients find insurance coverage from third party providers.

Group president Greg Case said the company beat all its key performance indicators.

He also pointed out that the results were achieved despite ’soft market conditions’ around the world and ‘unprecedented turmoil in the insurance industry’.