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Aon (AON) to Announce Q2 Earnings: What's in the Cards?

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Aon plc (AON - Free Report) is slated to report second-quarter 2021 results on Jul 30, before the opening bell.

Q2 Estimates

The Zacks Consensus Estimate for Aon’s earnings is pegged at $1.78 per share, indicating a 9.2% drop from the prior-year quarter’s reported figure.
The consensus mark for revenues stands at $2.6 billion, suggesting an increase of 4.2% from the year-ago quarter’s reported figure.

Factors to Note

The company is likely to have witnessed organic revenue growth in the second quarter owing to improvement in core areas.

Aon’s segments, namely Commercial Risk Solutions, Reinsurance Solutions, Data & Analytic Services, Health Solutions and Retirement Solutions are likely to have contributed to its top line in the to-be-reported quarter.

Commercial Risk Solutions’ revenues are likely to have gained from retention and management of the renewal book portfolio resulting in double-digit growth in Latin America and a solid progress across the United States plus advancement in every major geography. The Zacks Consensus Estimate for the Commercial Risk Solutions segment’s revenues is pegged at $1.2 billion, suggesting a 9.3% increase from the prior-year quarter’s reported figure.

Year-over-year growth in the Data & Analytics Services segment is expected to have been favorable as people’s spending on travel increased. The consensus mark for this segment’s revenues stands at $284 million, indicating a 3.6% rise from the year-ago quarter’s reported figure.

The Zacks Consensus Estimate for the Health Solutions segment’s second-quarter revenues is pegged at $286 million, suggesting a 10.9% improvement from the year-ago period’s reported figure. This upside can be attributed to growth in core health and benefits brokerage.

The Retirement Solutions is expected to have gained from growth in every major business along with strong growth in Human Capital. The consensus mark for the Retirement Solutions business also looks favorable as its revenues are estimated at $416 million, indicating 5.9% growth from the year-ago quarter’s reported figure.

The Reinsurance Solutions segment is likely to have witnessed growth in the to-be-reported quarter on the back of constant new business generation. The consensus estimate for the segment’s second-quarter revenues stands at $467 million, indicating an improvement of 4.2% from the prior-year quarter’s reported number.

However, the bottom line is likely to have been partly offset by escalating expenses due to substantial investments in the priority areas for long-term growth and an increase in certain discretionary expenses.

The company is likely to have continued with its share repurchase program, which provided a cushion to its overall performance.

Aon is likely to have witnessed higher free cash flow, driven by its strong operational improvement.

What Our Quantitative Model Predicts

Our proven model predicts 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 as you can see here:

Earnings ESP: Aon has an Earnings ESP of +2.91%. This is because the Most Accurate Estimate is pegged at $1.83, higher than the Zacks Consensus Estimate of $1.78. You can uncover the best stocks to buy or sell before they’re reported with our  Earnings ESP Filter.

Aon plc Price and EPS Surprise

Aon plc Price and EPS Surprise

Aon plc price-eps-surprise | Aon plc Quote

Zacks Rank: Aon currently 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

Earnings of $4.28 per share, beat the Zacks Consensus Estimate by 5.9%. Moreover, the bottom line climbed 16% year over year.

Results benefited from higher revenues and solid contributions from its Reinsurance Solutions, Retirement Solutions, Health Solutions and Commercial Risk Solutions segments.

The company’s earnings beat estimates in all the trailing four quarters, the average being 3.75%.

Other Stocks to Consider

Some other stocks worth considering from the insurance space with a perfect mix of elements to surpass estimates in the upcoming quarterly releases are as follows:

Assurant, Inc. (AIZ - Free Report) currently has a Zacks Rank of 3 and an Earnings ESP of +0.50%.

Radian Group Inc. (RDN - Free Report) is currently Zacks #3 Ranked and has an Earnings ESP of +1.66%.

American International Group, Inc. (AIG - Free Report) has an Earnings ESP of +7.56% and is presently a #3 Ranked player.