The world’s largest insurance broker, Aon (AON) posted on Friday a third-quarter profit that missed the market’s forecast, hurt by higher costs from Hewitt that offset stronger revenues in its human resources solutions business.
The Chicago-based provider of risk management, insurance and consulting and outsourcing services posted net income of $198 million, or 59 cents a share, compared with $144 million, or 51 cents a share, in the same quarter last year.
Excluding one-time restructuring and acquisition costs the company earned 69 cents a share, which is below average analyst estimates polled by Thomson Reuters of 73 cents.
Revenue for the three-month period was up 51% to $2.7 billion, due primarily to a 46% increase in commissions and fees from acquisitions, divestitures and organic sales growth.
Aon’s chief executive, Greg Case, attributed the results to strong performance in its risk segment and synergies related to its recent acquisition of Hewitt.
“While macro economic conditions remain challenging globally, we are firmly on track to deliver growth in 2011,” Case said.
However higher costs offset the strong sales gains, with operating expenses up 55%, or $844 million, or $2.4 billion primarily due to the inclusion of Hewitt’s costs.
The company said its restructuring programs remain on track to deliver cost savings and improve financial flexibility. As part of that effort, the company bought back $175 million of its shares last quarter.