Aon’s Q2 2015 Earnings Report: Total Revenue -4%; Net income -41%

Aon’s second quarter earnings report highlights some of the difficulties the re/insurance industry is experiencing. Total revenues from Aon’s combined sector activities decreased by four percent to $2.80 billion from $2.913 billion in Q2, 2014. The percentage decline for the first six months was the same; total revenues dropping from $5.854 billion in 2014 to $5.642 billion in 2015.

Net income attributable to shareholders was even more affected, as it decreased to $178 million from $303 million, a 41 percent drop. For the first half of 2015, net income attributable to shareholders decreased by 20 percent to $506 million from $629 million for the first half of 2014.

Aon’s report noted, however, that “net income per share attributable to Aon shareholders, adjusted for certain items, increased 5 percent to $1.31, compared to $1.25 in the prior year quarter, including an $0.08 per share unfavorable impact on adjusted net income from continuing operations if the Company were to translate prior year quarter results at current quarter foreign exchange rates ‘”foreign currency translation’).” Certain additional items also had an impact on the second quarter’s results, as detailed further on in the report.

President and CEO Greg Case commented: “Our second quarter results, adjusted for certain items, reflect double-digit earnings per share growth of 11 percent, after excluding the impact from foreign currency translation, driven by organic revenue growth in both Risk and HR Solutions, operating margin improvement from our investments in innovative client-serving capabilities and effective capital management, highlighted by the repurchase of $300 million of ordinary shares in the quarter.”

He added that “despite macroeconomic headwinds, we expect solid performance across each of our four key financial metrics for the second half of the year, including significant free cash flow growth, placing us firmly on track towards our goal of delivering $2.3 billion or more of free cash flow for the full year 2017.”

Source: Aon plc

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