Aon Plc (AON) To Report Q1 Earnings: What's In The Cards?
Zacks Investment Research | May 04, 2017 09:42PM ET
Aon plc (NYSE:AON) is set to report first-quarter 2017 results on May 10, before the market opens. Last quarter, the company posted a positive earnings surprise of 2.81%. Let’s see how things are shaping up for this announcement.
Factors to be Considered this Quarter
Aon’s strategic investments to strengthen underlying performance and numerous initiatives to maximize return on invested capital bode well. We expect the company to have generated better operating leverage from its Risk Solutions segment.
Aon’s continuous improvement in client leadership in renewal book portfolio through a proactive client partnership – Aon Client Promise – raises optimism. The company is likely to have increased retention rates. This in turn is expected to boost its revenues across the globe.
Significant investments in innovative technology as well as data and analytics, including Aon InPoint and the recently launched Risk Insight Platform are likely to have driven business in the first quarter.
The acquisition of Admix at year-end 2016 boosted the company’s inorganic growth and is expected to have contributed to revenues.
Continued business generation in Aon’s client treaty and increase in facultative placements are also likely to have facilitated growth of its reinsurance business.
The HR solution segment is expected to have performed well on the back of Aon Hewitt's leadership and in-depth understanding of the market.
Its divesture of non-core operations is likely to have driven better results through improvement in the core businesses.
Aon’s share repurchase programs are likely to have boosted its margin by limiting the outstanding share count.
However, the company is expected to suffer from unfavorable market conditions, especially pricing pressures in various countries across Europe and Asia.
Despite certain divestments, Aon’s first-quarter earnings are likely to be affected by rising expenses related to its non-core operations.
Aon’s dependence on debt financing is expected to have resulted in higher interest expenses and is likely to adversely impact margins.
Aon PLC Price and EPS Surprise
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