AIG Surpasses Zacks Estimates

• By Zacks Equity Research
• On 12:03 pm EST, Monday November 9, 2009

American International Group Inc.’s (NYSE: AIG - News) third-quarter operating earnings of $1.9 billion ($2.85 per share) were substantially ahead of the Zacks Consensus Estimate of $1.20. This also compares favorably with the operating loss of $9.2 billion or $68.36 per share in the prior-year quarter.

The upside came primarily from recovery in the value of its investments offsetting declines in operating revenue at its insurance businesses. Operating income excludes after-tax net investment gains or losses of consolidated entities and after-tax non-qualifying derivative hedging activities gains or losses.

Net income for the quarter was $455 million, or 68 cents per share, compared to a net loss of $24.5 billion or $1.81 per share in the year-ago quarter. The net loss included after-tax net realized investment losses of $1.8 billion and derivative gains of $344 million, compared to after-tax net realized investment losses of $15.1 billion and derivative losses of $172 million in the prior-year quarter.

The General Insurance Operation’s operating earnings for the quarter increased to $814.0 million compared to a loss of $1.3 billion in the year-ago quarter. The Life Insurance & Retirement Services segment’s operating earnings for the quarter increased to $1.3 billion compared to loss of $15.3 billion in the year-ago quarter.

As of Sept. 30, 2009, book value per share improved to $540.19 from $529.25 as of Sept. 30, 2008.

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