AIG Posts Surprise Q4 Adjusted Profit

Insurance giant, American International Group (NYSE: AIG) reported late on Thursday that it swing into a loss in the fourth quarter as its bottom line took a hit from a loss stemming from the sale of its aircraft leasing business and Super storm Sandy; however, on adjusted basis, earnings topped Street’s estimate sending shares 4.27% higher in aftermarket trading.

For the fiscal first quarter, AIG reported a net loss of $4 billion or $2.68 a share, compared to a profit of $21.5 billion or $11.31 a share, in the year-earlier quarter.

The recently concluded quarter included a loss of $4.4 billion linked to a loss arising from the sale of aircraft leasing business, The International Lease Finance Corporation (ILFC) and $2 billion in payouts linked to Super Storm Sandy.

Earlier in December 2012, AIG entered in a deal with an investors group to sell 90% stake in ILFC. The deal is likely to close in the fiscal second quarter of 2013, provided it is approved by regulators both in China and the U.S.  However, after adjusting onetime items, earnings came at 20 cents, which dumbfounded the Street. Analysts’ consensus estimate was for quarterly loss of 8 cents a share on revenue of $8.70 billion. In the same period of last year, AIG posted adjusted earnings of 82 cents a share.

Among insurer’s different revenue generating segments, after-tax operating income from AIG’s life-insurance business climbed 20 percent jump in the recently concluded quarter.  In direct investment book segment, the insurer reported after tax operating income of $509 million, up from after tax loss of $27 billion while capital markets operation segment posted after tax operating income of $300 million, up from after tax operating income of  $46 million in the year earlier quarter.

In property and casualty division, AIG posted an after-tax operating loss of $945 million owing to the Sandy losses.

In the fiscal 2012 net income came at $3.4 billion, or $2.04 per diluted share, compared to $20.6 billion, or $11.01 per diluted share, reported in fiscal 2011.



Ed Liston is a senior contributing editor at An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.