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What's in Store for American International's (AIG) Q2 Earnings?

·5 min read

American International Group, Inc. AIG is scheduled to release second-quarter 2022 results on Aug 8, after the market closes.

Q2 Estimates

The Zacks Consensus Estimate for American International’s second-quarter earnings is pegged at $1.23 per share, which indicates a decline of 19.1% from the prior-year quarter’s reported figure. Meanwhile, our estimate suggests earnings per share (EPS) of $1.25 in the to-be-reported quarter.

The consensus mark for revenues stands at $12.1 billion, suggesting 0.6% growth from the year-ago quarter’s reported number. The same also matches our estimate.

Earnings Surprise History

American International’s earnings beat estimates in each of the trailing four quarters, the average surprise being 18.87%. This is depicted in the chart below:

American International Group, Inc. Price and EPS Surprise

American International Group, Inc. Price and EPS Surprise
American International Group, Inc. Price and EPS Surprise

American International Group, Inc. price-eps-surprise | American International Group, Inc. Quote

Factors to Note

American International’s second-quarter revenues are likely to reflect benefits from solid contributions from its General Insurance segment. The General Insurance segment might have gained from improved net premiums written resulting from a well-performing commercial business. Continued rate increases, strong retention rates and new business growth may have favored the to-be-reported quarter’s performance. The Zacks Consensus Estimate for the segment’s net premiums earned is pegged at $6,491 million, indicating 4.4% year-over-year growth from the prior-year quarter’s reported figure. Our estimate suggests the metric at $6,367.9 million.

Additionally, the to-be-reported quarter’s adjusted pre-tax income of the General Insurance unit might have benefited from solid underwriting results leading to an improved combined ratio. Expense discipline and reduced catastrophe losses are likely to have contributed to the upside. The Zacks Consensus Estimate for the metric stands at $1,230 million (suggesting a rise of 3% from the year-ago quarter’s reported number), while our estimate indicates the segment's adjusted pre-tax income almost at the same level.

In the Life and Retirement segment, lower net investment income stemming from reduced call and tender activity as a result of increasing interest rates might have dampened the growth prospects of the segment in the second quarter. The decline in fee income, the lack of an affordable housing portfolio and the continued incidence of COVID-19 claims are likely to have weighed on the segment as well. Nevertheless, the downside might have been partly offset by the product diversity coupled with growing premiums and deposits witnessed amid the segment.

The Zacks Consensus Estimate for second-quarter total revenues of the Life and Retirement segment is pegged at $4,918 million, which indicates a decline of 2.5% from the prior-year quarter’s reported figure. Meanwhile, our estimate suggests the metric at $4,965.7 million. The consensus mark for the segment’s adjusted pre-tax income stands at $832 million (implying a 26% decline from the year-ago quarter’s reported number), while our estimate for the metric stands at $881 million.

Despite the benefits from its transformative program AIG 200 and lower interest expenses, margins of American International might have borne the brunt of escalating costs related to policyholder benefits and losses incurred plus general operating and other expenses in the to-be-reported quarter.

What Our Quantitative Model Predicts

Our proven model does not conclusively predict an earnings beat for American International this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, that’s not the case here.

Earnings ESP: American International has an Earnings ESP of -4.88%. This is because the Most Accurate Estimate of $1.17 is pegged lower than the Zacks Consensus Estimate of $1.23. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: AIG currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks to Consider

While an earnings beat looks uncertain for American International, here are some companies from the Finance sector that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this time:

National Bankshares, Inc. NKSH has an Earnings ESP of +7.51% and a Zacks Rank #1, currently. The Zacks Consensus Estimate for National Bankshares’ second-quarter 2022 earnings is pegged at $3.62per share.

The consensus mark for NKSH’s second-quarter earnings has moved 7.4% north over the past 30 days.

Atlas Corp. ATCO has an Earnings ESP of +9.72% and a Zacks Rank #2, currently. The Zacks Consensus Estimate for Atlas' second-quarter 2022 earnings is pegged at $1.60 per share. For second-quarter earnings, it witnessed two upward estimate revisions compared to none in the opposite direction.

ATCO beat earnings estimates in two of the trailing four quarters and missed the same twice.

American Equity Investment Life Holding Company AEL has an Earnings ESP of +0.96% and a Zacks Rank #3, currently. The Zacks Consensus Estimate for American Equity Investment’s second-quarter 2022 earnings is pegged at $3.53 per share.

AEL beat earnings estimates in two of the trailing four quarters and missed the same twice.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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American International Group, Inc. (AIG) : Free Stock Analysis Report
 
American Equity Investment Life Holding Company (AEL) : Free Stock Analysis Report
 
National Bankshares, Inc. (NKSH) : Free Stock Analysis Report
 
Atlas Corp. (ATCO) : Free Stock Analysis Report
 
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