Aon plc (AON - Free Report) is slated to report second-quarter 2020 results on Jul 31, before the opening bell.
Q2 Estimates
The Zacks Consensus Estimate for Aon’s second-quarter earnings is pegged at $1.92 per share, indicating an improvement of 2.7% from the prior-year quarter.
However, the consensus mark for revenues stands at $2.54 billion, suggesting a decline of 2.6% from the year-ago reported figure.
Factors to Note
Weak performance among its segments — Commercial Risk Solutions, Data & Analytic Services, Health Solutions and Retirement Solutions — is likely to get reflected in the second-quarter results. Soft segmental revenues might have dented the company’s top-line growth in the to-be-reported quarter.
The Zacks Consensus Estimate for the Commercial Risk Solutions segment’s second-quarter revenues is pegged at $1.1 billion, suggesting a decline of 2.7% fall from the prior-year quarter.
The Data & Analytics Services segment might have witnessed strain on the more discretionary parts of its business on account of the pandemic. The consensus mark for the segment’s revenues stands at $283 million, indicating a decline of 1% from the year-ago reported figure. Meanwhile, the Zacks Consensus Estimate for the Health Solutions segment’s second-quarter revenues is pegged at $310 million, suggesting a decrease of 2.2% from the year-ago reported figure.
Also, decline in core retirement, which is likely to have resulted from reduced billable hours and discretionary project-related work owing to the pandemic, may have impacted the Retirement Solutions segment. The Zacks Consensus Estimate for the segment’s revenues stands at $399 million, suggesting a decline of 4.8% from the year-ago reported figure.
However, the Reinsurance Solutions segment is likely to have witnessed growth in the to-be-reported quarter. The segment might have benefited from new business generation. The consensus estimate for the Reinsurance Solutions segment’s second-quarter revenues stands at $432 million, indicating an improvement of 2.9% from the year-ago reported figure.
Per its last earnings call, the company expected an unfavourable impact of 3 cents per share on second-quarter operating income (assuming currency rates to remain stable). Despite adverse forex fluctuation, the company is likely to have gained from a favorable operational margin, which in turn is likely to have generated free cash flows for Aon.
Finally, the company might have incurred lower costs in the to-be-reported quarter, primarily due to lower restructuring charges and the preemptive reduction and deferral of certain discretionary expenses related to COVID-19.
What Our Quantitative Model Predicts
Our proven model does not conclusively predict an earnings beat for Aon this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.
Earnings ESP: Aon has an Earnings ESP of -1.76%. This is because the Most Accurate Estimate of $1.89 is pegged lower than the Zacks Consensus Estimate of $1.92. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Aon carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Highlights of Q1 Earnings and Surprise History
Aon’s first-quarter 2020 operating earnings of $3.68 per share missed the Zacks Consensus Estimate by 0.5%. However, the metric improved 11.2% year over year on the back of higher revenues and strong segmental contributions. Total revenues in the first quarter increased 2.4% to $3.2 billion including 5% organic revenue growth.
The company has beat estimates in two of the trailing four quarters, while missing the same twice. It has a trailing four-quarter earnings surprise of 0.49%, on average.
Stocks to Consider
Some stocks worth considering from the insurance space with a perfect mix of elements to surpass estimates in the upcoming quarterly releases are as follows:
Marsh & McLennan Companies, Inc. (MMC - Free Report) has an Earnings ESP of +3.95% and a Zacks Rank #3. The company is scheduled to release second-quarter 2020 earnings on Jul 30.
Prudential Financial, Inc. (PRU - Free Report) has an Earnings ESP of +0.73% and a Zacks Rank of 3, at present. The company is scheduled to release second-quarter 2020 earnings on Aug 4.
MetLife, Inc. (MET - Free Report) has an Earnings ESP of +2.51% and a Zacks Rank #3. The company is scheduled to release second-quarter 2020 earnings on Aug 5.
Zacks Top 10 Stocks for 2020
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Aon plc (AON - Free Report) is slated to report second-quarter 2020 results on Jul 31, before the opening bell.
Q2 Estimates
The Zacks Consensus Estimate for Aon’s second-quarter earnings is pegged at $1.92 per share, indicating an improvement of 2.7% from the prior-year quarter.
However, the consensus mark for revenues stands at $2.54 billion, suggesting a decline of 2.6% from the year-ago reported figure.
Factors to Note
Weak performance among its segments — Commercial Risk Solutions, Data & Analytic Services, Health Solutions and Retirement Solutions — is likely to get reflected in the second-quarter results. Soft segmental revenues might have dented the company’s top-line growth in the to-be-reported quarter.
The Zacks Consensus Estimate for the Commercial Risk Solutions segment’s second-quarter revenues is pegged at $1.1 billion, suggesting a decline of 2.7% fall from the prior-year quarter.
The Data & Analytics Services segment might have witnessed strain on the more discretionary parts of its business on account of the pandemic. The consensus mark for the segment’s revenues stands at $283 million, indicating a decline of 1% from the year-ago reported figure. Meanwhile, the Zacks Consensus Estimate for the Health Solutions segment’s second-quarter revenues is pegged at $310 million, suggesting a decrease of 2.2% from the year-ago reported figure.
Also, decline in core retirement, which is likely to have resulted from reduced billable hours and discretionary project-related work owing to the pandemic, may have impacted the Retirement Solutions segment. The Zacks Consensus Estimate for the segment’s revenues stands at $399 million, suggesting a decline of 4.8% from the year-ago reported figure.
However, the Reinsurance Solutions segment is likely to have witnessed growth in the to-be-reported quarter. The segment might have benefited from new business generation. The consensus estimate for the Reinsurance Solutions segment’s second-quarter revenues stands at $432 million, indicating an improvement of 2.9% from the year-ago reported figure.
Per its last earnings call, the company expected an unfavourable impact of 3 cents per share on second-quarter operating income (assuming currency rates to remain stable). Despite adverse forex fluctuation, the company is likely to have gained from a favorable operational margin, which in turn is likely to have generated free cash flows for Aon.
Finally, the company might have incurred lower costs in the to-be-reported quarter, primarily due to lower restructuring charges and the preemptive reduction and deferral of certain discretionary expenses related to COVID-19.
What Our Quantitative Model Predicts
Our proven model does not conclusively predict an earnings beat for Aon this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.
Earnings ESP: Aon has an Earnings ESP of -1.76%. This is because the Most Accurate Estimate of $1.89 is pegged lower than the Zacks Consensus Estimate of $1.92. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Aon carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Highlights of Q1 Earnings and Surprise History
Aon’s first-quarter 2020 operating earnings of $3.68 per share missed the Zacks Consensus Estimate by 0.5%. However, the metric improved 11.2% year over year on the back of higher revenues and strong segmental contributions. Total revenues in the first quarter increased 2.4% to $3.2 billion including 5% organic revenue growth.
The company has beat estimates in two of the trailing four quarters, while missing the same twice. It has a trailing four-quarter earnings surprise of 0.49%, on average.
Stocks to Consider
Some stocks worth considering from the insurance space with a perfect mix of elements to surpass estimates in the upcoming quarterly releases are as follows:
Marsh & McLennan Companies, Inc. (MMC - Free Report) has an Earnings ESP of +3.95% and a Zacks Rank #3. The company is scheduled to release second-quarter 2020 earnings on Jul 30.
Prudential Financial, Inc. (PRU - Free Report) has an Earnings ESP of +0.73% and a Zacks Rank of 3, at present. The company is scheduled to release second-quarter 2020 earnings on Aug 4.
MetLife, Inc. (MET - Free Report) has an Earnings ESP of +2.51% and a Zacks Rank #3. The company is scheduled to release second-quarter 2020 earnings on Aug 5.
Zacks Top 10 Stocks for 2020
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2020?
Last year's 2019 Zacks Top 10 Stocks portfolio returned gains as high as +102.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2020 today >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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