Aon consulting business gets international boost
GLOBAL - International business has given a boost to Aon Corp.'s consulting arm - though the company reported lower overall earnings and said overall revenue growth was less than anticipated.
Aon said total consulting revenue rose six percent to 300 million dollars in the third quarter. Benefits, compensation, management and communications consulting was up seven percent at 229 million dollars. Human resource consulting was up one percent at 71 million dollars.
Pre-tax income at the division increased rose 45% to 29 million dollars and the pre-tax margin rose to 9.7% from 7.0% a year before.
It said: "The pre-tax margin increase was driven by improved results in international consulting, human resource outsourcing, and the inclusion in third quarter 2003 of a three million-dollar stock-based incentive adjustment."
Aon's total net income from continuing operations slipped to 121 million dollars from 143 million dollars. Chairman and chief executive Patrick Ryan said: "Our continued progress in improving our financial discipline is masked by our current revenue results."
He added: "While softening market conditions are increasingly favourable to our clients, our revenue growth has not been what we anticipated." He withdrew a previously stated earnings objective of 2.2 dollars per share.
Aon, the world's second largest insurance broker, has seen its industry rival Marsh McLennan Companies embroiled in a probe by New York Attorney General Eliot Spitzer.
Ryan said: "We are in the process of terminating contingent commission arrangements, and we will work with clients, insurance carriers and regulators to implement a new business model which ensures that we are appropriately compensated, while maintaining full transparency and the trust of our clients."