Aon profit falls YOY in Q3
Net income attributable to Aon shareholders was $185 million in the third quarter of 2017 compared to $319 million in the same period a year ago as operating income falls and restructuring costs bite.
Operating income dropped 28 percent year on year to $265 million in the third quarter.
Restructuring expenses were $102 million in the third quarter, primarily driven by workforce reductions, IT rationalization, and other separation costs.
Total operating expenses in the third quarter increased 13 percent to $2.1 billion compared to the prior year period primarily due to $102 million of restructuring costs, a $62 million increase in operating expenses related to acquisitions, net of divestitures, and $54 million of accelerated amortization related to tradenames.
Overall, reported revenue increased 6 percent year on year to $2.3 billion in the third quarter, with organic revenue growth of 2 percent.
"Our results for the quarter reflect strong organic revenue growth in our reinsurance business, 170 basis points of adjusted operating margin improvement, and 18 percent adjusted earnings per share growth, highlighting increased operating leverage in our Aon United operating model and effective capital management with the repurchase of $750 million of shares in the quarter," said CEO Greg Case.
"Looking forward, we expect a strong finish to the year as we head into our seasonally strongest quarter. With continued momentum amplified by significant capital deployment towards our industry-leading platform and share repurchase, we believe we are on track to exceed $7.97 adjusted earnings per share in 2018 and deliver double-digit free cash flow growth over the long-term."
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