DOW JONES NEWSWIRES
American International Group Inc. (AIG) returned to the black
after six straight quarters of losses as the second-quarter's
results were absent the major write-downs which have been
pressuring the insurance giant's results.
The company said it sees stabilization in some of its
businesses. That comes as AIG sells off assets and plans to turn
other operations into independent public companies.
Shares were recently up 9.8% at $24.75 in premarket trading. The
stock through Thursday was already up 71% this week.
Chairman and Chief Executive Edward Liddy said the results
"reflect stabilization in certain of our businesses" and were
driven by lower net realized capital losses.
"While our insurance companies' operating results remain
challenged, largely driven by weak economic conditions and the
lingering effect of negative AIG events earlier in the year,
performance trends stabilized from the first quarter," he went on
to say. Liddy added that the company expects volatility in its
results to continue in the coming quarters, partly because of
charges related to restructuring.
AIG - which is 80% owned by the U.S. government following its
rescue of the company last September - posted income of $1.82
billion, or $2.30 a share, compared with a year-earlier loss of
$5.36 billion, or $41.13 a share. Excluding capital losses and
other items, earnings were $2.57 a share, compared with a
prior-year loss of $10.15.
Revenue jumped 48% to $29.53 billion.
Operating income at AIG's general-insurance business dropped 19%
on a decline in underwriting profit, while net premiums written
fell the same amount. Combined ratio, or the portion of premiums
paid out on claims and expenses, rose six percentage points to
98.2%.
Meanwhile, the life-insurance and retirement-services segment's
loss narrowed sharply as the company said it had a difficult but
improving operating environment.
-By Kerry Grace Benn, Dow Jones Newswires; 212-416-2353;
kerry.benn@dowjones.com