Summary
Aon plc's (AON) third quarter and nine-month report for 2010 highlights a period of mixed results, significantly impacted by the impending acquisition of Hewitt Associates, Inc. While overall revenue remained relatively flat for the quarter, it saw a modest 1% increase year-to-date, largely driven by contributions from acquisitions and growth in the Consulting segment, partially offset by declines in the Risk and Insurance Brokerage Services segment due to the soft insurance market and economic headwinds. The company reported an increase in net income from continuing operations attributable to Aon stockholders for the quarter, but a slight decrease year-to-date. Diluted earnings per share from continuing operations saw a healthy increase for the quarter. A significant event disclosed is the completion of the acquisition of Hewitt Associates for approximately $4.9 billion, which closed on October 1, 2010. This transaction is expected to create a global leader in human capital solutions and services and is anticipated to generate substantial cost savings. However, the financial statements as of September 30, 2010, do not yet reflect the full impact of the Hewitt acquisition, with its financial results and those of the associated restructuring to be incorporated in future periods.
Financial Highlights
52 data points| Revenue | $1.80B |
| Operating Expenses | $1.54B |
| Operating Income | $263.00M |
| Interest Expense | $50.00M |
| Net Income | $144.00M |
| EPS (Basic) | $0.52 |
| EPS (Diluted) | $0.51 |
| Shares Outstanding (Basic) | 278.70M |
| Shares Outstanding (Diluted) | 282.20M |
Key Highlights
- 1Revenue for the quarter ended September 30, 2010, was $1.8 billion, largely unchanged from the prior year. Year-to-date revenue increased 1% to $5.6 billion.
- 2Net income attributable to Aon stockholders from continuing operations increased 23% to $144 million for the third quarter, but decreased 1% to $501 million year-to-date.
- 3Diluted earnings per share from continuing operations increased 28% to $0.51 for the third quarter, and increased 5% to $1.78 year-to-date.
- 4Aon completed the acquisition of Hewitt Associates, Inc. for approximately $4.9 billion on October 1, 2010, a transaction expected to enhance its position in human capital solutions and generate significant cost savings.
- 5Operating expenses for the quarter decreased 4% to $1.5 billion, primarily due to lower restructuring costs, partially offset by Hewitt acquisition and integration costs.
- 6The company announced a global restructuring plan in connection with the Hewitt acquisition, expected to result in cumulative costs of approximately $325 million through the end of 2013.
- 7The Risk and Insurance Brokerage Services segment revenue was flat for the quarter, while the Consulting segment revenue increased 4%, driven by organic growth and acquisitions.