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Aon shares drop most since May as broker’s revenue falls short

Aon Plc, the insurance broker that moved its headquarters to London from Chicago, declined the most since May after a measure of revenue growth slowed.

Aon shares slid 3.74 percent to $59.00 in New York on Thursday, the biggest drop on the 81-company Standard & Poor’s 500 Financials Index. The shares have advanced about 6.5 percent this year.

Organic revenue growth, a measure of sales that excludes acquisitions and currency fluctuations, was two percent in the period, compared with four percent a year earlier, Aon said in a statement. Total revenue of $2.92 billion fell short of the average estimate of $2.94 billion in a survey of analysts by Bloomberg.

“We do not find the organic growth numbers particularly encouraging,” Charles Sebaski, an analyst at BMO Capital Markets, wrote in a research note. “We would expect the shares to trade flat to down.”

Aon’s first quarter earnings report showed a net income attributable to Aon shareholders from continuing operations was $261 million, or $0.82 per share, compared to $238 million, or $0.71 per share for the Q1 of 2012.

The report also noted that net income per share attributable to Aon shareholders from continuing operations, adjusted for certain items, was $1.11, a 13 percent increase compared to $0.98 in the prior year quarter.

“Our first quarter results reflected a solid start to the year with double-digit earnings growth driven by a strong performance in our Risk Solutions business and effective capital management, as highlighted by the repurchase of $300 million of ordinary shares in the quarter,” said Aon president and CEO Greg Case.

The company reports it benefited from redomiciling from the US to the UK.

“Effective tax rate on net income from continuing operations decreased to 26.1 percent in the first quarter compared to 28.0 percent in the prior year quarter due primarily to changes in the geographical distribution of income. The company currently anticipates an effective tax rate on net income from continuing operations of approximately 26.0 percent in 2013,” the report stated.

Aon is the second-largest insurance broker by market value. No. 1 Marsh & McLennan Cos., based in New York, slipped 0.64 percent to $37.34. No. 3 Willis Group fell 0.38 percent to $39.08.

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Published April 29, 2013 at 9:00 am (Updated April 28, 2013 at 7:37 pm)

Aon shares drop most since May as broker’s revenue falls short

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