DUBLIN - Aon plc (NYSE: NYSE:AON) reported a slight dip in share price following its second-quarter earnings release, which revealed an earnings miss alongside a revenue beat. AON shares were trading down 0.6% in Friday's premarket session following the results.
The global professional services firm announced adjusted earnings per share (EPS) of $2.93, falling short of the analyst consensus of $3.09. However, the company's revenue outperformed expectations, coming in at $3.8 billion against the predicted $3.76 billion.
The company's performance in the second quarter saw a robust 18% increase in total revenue compared to the same period last year, bolstered by organic growth and the strategic acquisition of NFP.
Greg Case, CEO of Aon, highlighted the firm's achievements, "Our colleagues delivered excellent results in the second quarter, with 6% organic revenue growth, adjusted operating margin expansion, and 19% growth in adjusted operating income." The acquisition of NFP, a prominent middle-market provider of advisory solutions, was completed for an enterprise value of $13.0 billion, and Aon is on track to deliver on its financial commitments.
The firm's operating margin decreased to 17.4%, a 910 basis point drop, while the adjusted operating margin saw a slight increase of 10 basis points to 27.4%. The diluted EPS decreased by 9% to $2.46, but the adjusted EPS showed a 6% increase from the prior year. The company's cash flow also saw a decline, with cash flows from operations and free cash flow both decreasing by 27% for the first six months of 2024.
Aon's results reflect the inclusion of NFP's ongoing operating expenses and a 6% organic revenue growth, offset by a 1% unfavorable impact from foreign currency translation. The firm's Commercial Risk Solutions, Reinsurance Solutions, Health Solutions, and Wealth Solutions all contributed to the organic revenue growth, with particularly strong performance in Health and Wealth Solutions, driven by advisory demand and project-related work.
The second quarter also saw Aon appointing Edmund Reese as the new CFO, effective July 29, 2024, and announcing a unique public-private solution to build insurance capacity in Ukraine, contributing to economic recovery efforts with a total capacity of $350 million.
Aon continues to focus on its long-term growth initiatives and delivering value to its clients, positioning itself for the remainder of 2024 and beyond. The company's share repurchase program remains active, with 0.8 million class A ordinary shares repurchased for approximately $250 million in the second quarter, and about $2.8 billion remaining under the authorization.
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