Aon Q3 Earnings Beat as Expenses Fall, Free Cash Flow Rises; stock market gains (NYSE:AON)

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Aon (NYSE: AON) posted third-quarter profits that beat Wall Street’s average estimate on Friday, as the insurance broker’s operating expenses fell 40% from a year ago, while flow growth available cash has jumped nearly 80% since the start of the year.

Third-quarter adjusted EPS of $2.02 beat Wall Street’s average estimate of $1.99 and climbed $1.74 from a year earlier. Store increased by 1.1% at 1:30 p.m. ET, as U.S. stock markets climb.

Revenue of $2.7 billion, meanwhile, was below the consensus of $2.81 billion and remained roughly flat compared to the third quarter of 2021. Nevertheless, organic revenue growth of 5% has been driven by strong retention and net new business generation.

Reinsurance Solutions performed best in terms of revenue growth among all segments of the company, growing 12% year-on-year to $396 million, driven by robust growth in its treaty portfolio. On the other hand, Wealth Solutions fell 7% year-on-year to $326 million, making it the worst performing unit due to a drop in delegated AUM revenue.

Total operating expenses were $2.11 billion in the third quarter, compared to $3.5 billion in the third quarter of 2021.

Year-to-date free cash flow of $2.05 billion jumped $1.15 billion as of September 30, 2021.

Operating profit of $590 million compared to a loss of $801 million in the year-ago quarter. The operating margin, meanwhile, was 21.9% compared to -29.6% in Q3 last year.

During the third quarter, the company repurchased 4.2 million shares of Class A common stock for approximately $1.2 billion.

Earlier, Aon Non-GAAP EPS $2.02 beats $0.03, revenue $2.7 billion misses $110 million.

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