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The company's third-quarter net income attributable to Aon stockholders was $120 million or $0.41 per share, compared with $117 million or $0.40 per share in the prior year quarter.
Net income attributable to Aon stockholders from continuing operations decreased to $117 million or $0.40 per share from $155 million or $0.53 per share in the year-ago quarter.
Excluding certain items, the company's net income continuing operations reached $190 million or $0.65 per share, 6% lower than $203 million or $0.69 per share last year, including a $62 million or 69% decline in investment income.
On average, 16 analysts polled by Thomson Reuters expected the company to report earnings of $0.66 per share for the quarter. Analysts' estimates typically exclude special items.
The company also reported after-tax income from discontinued Operations of $3 million or $0.01 per share for the third quarter, compared to an after-tax loss of $38 million or $0.13 per share for the prior year quarter.
Aon's quarterly revenues were down 2% to $1.81 billion from $1.85 billion in the same quarter last year. Ten analysts had a consensus revenue estimate of $1.85 billion for the quarter. The company attributed lower revenues to a 5% decline from foreign currency translation and a 69% decline in investment income, partially offset by a 9% increase from acquisitions, primarily Benfield, net of dispositions.
For the second quarter, the Chicago, Illinois-based company had reported net income of $149 million or $0.52 per share on revenues of $1.89 billion.
In its segments, Risk and Insurance Brokerage Services generated quarterly revenues of $1.49 billion, up 1% from $1.47 billion last year. The company attributed the revenue growth to an 11% increase from acquisitions, primarily Benfield, net of dispositions, partially offset by a 5% unfavorable impact from foreign currency translation on commissions and fees and a 63% decline in investment income. Organic revenue declined 3%.
Consulting revenue decreased 9% to $308 million from $337 million in the prior-year quarter, mainly due to a 5% decline in organic commissions and fees revenue and a 4% unfavorable impact from foreign currency translation.
Unallocated investment income and other revenue was $19 million, down by decreased $21 million from the prior year quarter, hurt by a $27 million decline in certain private equity distributions, partially offset by $10 million of revenue related to the company's equity ownership in certain insurance investment funds.
For the nine-month period, the company's net income attributable to Aon stockholders was $549 million or $1.88 per share, compared with $1.47 billion or $4.94 per share last year. Total revenue declined 3% to $5.55 billion from $5.71 billion in the same period of fiscal 2008.
The company also said that it increased estimated annualized savings related to the 2007 restructuring program by $97 million to $467 million, and costs necessary to achieve savings by $150 million to $700 million. Restructuring savings related to the Aon Benfield restructuring program are estimated at $14 million in the third quarter. Before any potential reinvestment of savings, the Benfield restructuring program is now expected to deliver cumulative cost savings of $45 million to $50 million in 2009, $90 million to $100 million in 2010 and $122 million in 2011.
Among others in the sector, Arthur J Gallagher & Co. (AJG | Quote | Chart | News | PowerRating) reported a higher profit for its third quarter from a year ago, helped primarily by an increase in quarterly revenues as commissions and fees improved. The Itasca, Illinois-based company reported net income for the third quarter of $41.6 million or $0.41 per share, compared to $37.8 million or $0.40 per share in the year-ago quarter. Revenues increased to $439.5 million from $428.2 million in the prior-year quarter.
Marsh & McLennan Companies, Inc. (MMC | Quote | Chart | News | PowerRating) is slated to announce its results on November 4. Analysts are of the view that the company will earn $0.26 per share on revenues of $2.61 billion.
Another insurance broker Willis Group Holdings Ltd. (WSH | Quote | Chart | News | PowerRating) posted an increase in profit for the third quarter from a year ago, as revenues improved 25%. The company's profit from continuing operations was $78 million, up from $36 million in the year-ago period. On a per share basis, net income rose to $0.46 from $0.25 last year. Willis' total revenues were up 25% to $725 million from $579 million last year.
AOC is curerntly trading at $38.42, down $2.77 or 6.72%, on the NYSE. In the past 52 weeks, the shares have traded between $34.81 and $46.50.
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