Aon ( AOC) said first-quarter profit fell because of higher pension costs. But the results still beat analyst estimates by a penny.

The company earned $152 million, or 48 cents a share, in the quarter ended March 31, compared with $160 million, or 57 cents a share, a year ago. Analysts were expecting 47 cents a share. The latest quarter included a $37 million pretax charge related to the World Trade Center disaster, about $32 million pretax of increased pension costs and a $34 million pretax increase in equity and other investment income, the company said.

Revenue was $2.4 billion, up 14%, but foreign exchange translations accounted for 5% of the increase, the company said.

"Although pension costs increased in the quarter compared to last year, improvements in our risk and insurance brokerage businesses more than offset these incremental costs, and brokerage margins improved," said Patrick G. Ryan, the company's chief executive. "Consulting revenue growth was good but margins were impacted, in part, by an increase in lower margin outsourcing business. Insurance underwriting also had good top-line growth, but underperformance in certain warranty and P&C lines compressed margins."

The Chicago-based company said total expenses increased to $2.13 billion, from $1.82 billion last year.

Looking to full-year 2003, the company expects to earn $1.90 to $2 a share, in line with analyst predictions of $1.97 a share, on average. The company earned $1.59 in 2002.

Shares of the insurance brokerage were recently up 2% to $23.05 in morning trading.