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Aon plc (NYSE:AON) Q4 adjusted EPS fell short of Wall Street expectations, delivering no growth from the same quarter a year ago. It stock slipped 0.6% in Friday morning trading.
Q4 adjusted EPS $3.89, trailing the consensus of $4.06, rose from $2.32 in Q3 and was unchanged from Q4 2022.
Q4 total revenue of $3.38B, topping the $3.36B consensus, increased from $2.95B in the prior quarter and $3.13B a year ago. The company delivered Q4 organic revenue growth of 7%.
Total operating expenses increased to $2.60B in Q4 from $2.12B in Q4 2022. Other general expenses jumped 70% Y/Y, due to a $197M charge related to certain accrued actual or anticipated legal settlement expenses and $17M of transaction costs for its expected acquisition of NFP.
Including certain items, such as the legal expenses and the acquisition-related costs, Q4 GAAP EPS slid to $2.49 from $3.17 in the year-ago quarter.
In December, it agreed to acquire middle-market P&C broker NFP for $13.4B.
Revenue by segment:
- Commercial Risk Solutions — $1.91B rose 5% Y/Y; organic revenue growth was 4%.
- Reinsurance Solutions — $323M increased 18%, with organic growth of 14%.
- Health solutions — $763M, up 13% Y/Y, with organic growth of 11%.
- Wealth Solutions — $377M, up 3% Y/Y, with organic growth of 5%.
Aon (AON) expects to deliver mid-single-digit or more organic revenue growth for the full-year 2024 and over the long term, it said in its presentation slides. Adjusted operating margin is expected to rise in 2024 and over the long term.
“While free cash flow will be reduced in the near term by restructuring, NFP deal and integration costs, and higher interest expense, we expect to return to our trajectory of double-digit free cash flow growth over the longer term, driven by operating income growth and ongoing working capital improvements,” management said.