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Aon posts lower adjusted net income YOY in Q1

Aon Plcreported first-quarter net income attributable to shareholders of $315 million,or $1.15 per share, down 4% from $328 million, or $1.14 per share, in theyear-ago quarter.

Net income per share attributable to Aon shareholders,adjusted for certain items, dropped 1% to $1.35 in the first quarter from $1.37in the prior-year period. Adjusted net income in the quarter reflects anegative impact of 5 cents per share if the company were to translateprior-year quarter results at current quarter foreign exchange rates. Anadverse impact of foreign exchange rates on the re-measurement of monetaryassets and liabilities in nonfunctional currencies caused a loss of 5 cents pershare. Further, the prior-year quarter included other income of $42 million,pretax, or 12 cents per share after tax.

The S&P Capital IQ consensus normalized EPS estimate forthe quarter was $1.33.

Total revenue was $2.79 billion, down 2% from $2.85 billionin the prior-year quarter. The decline was attributed to a 3% unfavorableimpact from foreign currency translation and a 2% cut in commissions and feesrelated to net divestitures. The items were partially offset by 3% organicrevenue growth.

Total operating expenses declined 3% to $2.34 billion in thefirst quarter from $2.41 billion in the year-ago quarter. The company saw an$82 million favorable impact from foreign currency translation, a $41 millioncut in expenses related to net divestitures and a $13 million decrease inintangible asset amortization. It also recorded an increase in expense tosupport 3% organic revenue growth and $20 million of transaction and portfoliorepositioning related costs in HR solutions associated with the sale ofbusinesses.

Intangible asset amortization expense fell to $67 millionfrom $80 million in the prior-year quarter. The $13 million decline consists ofa $9 million cut in HR solutions and a $4 million drop in risk solutions.

Aon repurchased 7.7 million class A ordinary shares forapproximately $750 million in the first quarter. As of March 31, the companyhad $3.3 billion of remaining authorization under its share repurchase program.