Aon sees payoff from tax inversion
By Becky Yerak, Chicago Tribune | |
McClatchy-Tribune Information Services |
The savings highlights the allure for
Deals in which U.S. companies avoid federal taxes by moving their tax domiciles overseas are known as "inversions." In all, nine so-called "inversion" deals have been agreed to this year and more are under consideration. The transactions are setting a record pace since the first inversion was done 32 years ago.
Aon announced its headquarters move overseas in
On Thursday, he criticized the move and asked
Aon reported a corporate tax rate of 17.5 percent in the second quarter. The last tax rate it paid as a U.S. company in the same period was 24.7 percent.
On Friday, Aon earned
"The earnings beat was driven by a materially lower-than-expected effective tax rate due to the favorable impact from changes in the geographic distribution of income," among other things,
Tax savings is giving Aon more resources to make such shareholder-friendly moves as share repurchases.
Aon also reported that it repurchased shares for about
Stock buybacks are generally cheered by investors because they're supposed to reduce the number of shares in the open market. So when the company makes money, profits per share are higher because those earnings are sliced into fewer pieces. That should make each share worth more because it's entitled to a bigger piece of company profits.
The number of Aon shares outstanding fell to 302 million in the second quarter, compared with 317 million in the same period of 2013.
Aon's revenue, however, came in lower than expected, leading its shares to fall 4.2 percent in late morning trading to
In the first quarter of 2014, Aon's corporate tax rate was 18.9 percent. The company warned Friday, however, that the company's overall tax rate in the second half of the year could rise.
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