NU Online News Service, Oct. 28, 1:43 p.m.EDT

Despite reporting a 38 percent increase in 2011 third-quarternet income, financial analysts appear to be dissatisfied with AonCorp.'s results and they question the performance of its consultingunit.

The Chicago-based insurance broker reports third-quarter netincome rose $54 million to $198 million. Earnings per share rose 8cents to 59 cents a share, missing analysts' consensus earnings of73 cents. Revenues rose 51 percent, or $922 million, to $2.7billion.

For the first nine months, net income rose 48 percent, or $227million, to $702 million. Earnings per share rose 37 cents to$2.05. Revenues were up 48 percent, or $2.7 billion, to $8.3billion.

Organic growth for the insurance-brokerage business rose 3percent on a 9 percent increase in revenue, Aon says.

In response to a question during a conference call today, GregCase, president and CEO of Aon, says insurance rates arebeginning to tighten, “but we have not seen the turn” in the softmarket. He says the downward direction in prices is becoming lessand less.

On the reinsurance side, he says, rates are “getting flat aswell.”

Concerning acquisitions, he says the company made five this yearamounting to $100 million in revenue. The firm will continue tolook at opportunities and make acquisitions “where they makesense.”

However, the focus of financial analysts' questions was Aon'sconsulting business, particularly the integration of the humanresource and outsourcing consulting firm Hewitt with AonConsulting.

Despite reporting a 246 percent increase in revenues, organicgrowth came in at minus-2 percent for the division.

Aon says the decline was due “primarily to a decline in healthand benefits and communications consulting” on theconsulting-services side, and on the outsourcing side the declinewas due “to a decline in project-related revenue and pricecompression.”

Aon reports restructuring expense for Aon Hewitt rose to $26million. It says it has completed all restructuring activities ofAon Hewitt. The cost was primarily related to workforce reductionand lease consolidation.

Last year, Aon said it planned to eliminate between1,500 and 1,800 positions globally related to the Aon Hewittacquisition. The acquisition was complete a year ago thismonth.

Case says that modest improvement is expected in consulting forthe fourth quarter as the economy begins to stabilize.

By noon time today, Aon's shares dropped close to 7 percent to$47.53 a share, off close to $4. Aon's shares closed on Friday down5 percent, or $2.28 a share, to $47.99 a share.

This story was updated at 4:07 p.m. EDT with the closingshare price.