Aon's changes reduce profit

NEW YORK -- Aon Corp. said Thursday its profit slipped 7 percent in the fourth quarter as the insurance broker incurred costs to jettison unwanted businesses as part of a plan to save money.

Aon earned $207 million, or 64 cents per share, down from $223 million, or 72 cents per share, in the year-earlier quarter.

Excluding $34 million in restructuring costs and other unusual charges, profit from continuing operations was 69 cents per share, compared with 59 cents per share in the 2006 quarter. Analysts polled by Thomson Financial forecast profit of 66 cents per share.

Revenue, which the company mainly derives from brokerage commissions, climbed 8 percent to $2.03 billion from $1.88 billion. Analysts expected revenue of $2.13 billion.

Chicago-based Aon has been selling its insurance underwriting businesses to focus mostly on brokering, or charging fees for linking clients with underwriters.

While most other brokers are having trouble growing, Aon reported 2 percent "organic" growth, which excludes currency translations and acquisitions.

Chuck D. Hamilton, an analyst with FTN Midwest Securities Corp., said this is impressive given how competitive the industry is. Aon is probably winning some customers from Marsh, he said.

"Clearly, they appear to be winning the battle for market share," he said.

The company said it saved $64 million in the fourth quarter through the early phases of its restructuring, bolstering profit margin to 18.5 percent from 17.5 percent a year earlier. Most of the savings came from cutting jobs in the brokerage segment, the company said.

For 2007, Aon earned $864 million, or $2.69 per share, compared with profit of $720 million, or $2.13 per share, in 2006.