AIG Posts Net Loss After Unit Sale, but Results Beat
Insurer American International Group reported a net loss for the fourth quarter following the sale of its aircraft-leasing business but its operating results topped forecasts.
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AIG's net loss was of $4 billion, or $2.68 a share, compared with a profit of $21.5 billion, or $11.31 a share, a year earlier.
That reflects a $4.4 billion net loss from the sale of its aircraft leasing business, International Lease Finance Corporation, the company said.
In December 2012, AIG entered an agreement to sell a 90-percent stake in ILFC to an investor group. The deal is expected to close in the second quarter of 2013. The transaction is a subject to regulatory approvals in the U.S. and China.
The company also said its results were affected by Hurricane Sandy.
"Hurricane Sandy was clearly a big hit in the quarter," AIG CEO Robert Benmosche said on CNBC's "Closing Bell" after the earnings report. "If you look at the underlying results, you've seen gradual improvement. The top line is holding steady. Our casualty line is coming down. We're making it up with better margin product. Our loss ratios for eight quarters are coming down," he said.
Excluding items, AIG posted a surprise profit of 20 cents a share, compared with a profit of 82 cents a share a year ago.
Analysts had expected the company to report a quarterly loss excluding items of 8 cents a share on $8.70 billion in revenue, according to a consensus estimate from Thomson Reuters.
"This is a good story for several years to come," Benmosche said. "We're going to do a dividend as soon as we think it makes sense. We're focusing our capital management on our debt — we've got to improve our coverage ratio."
During the fourth quarter, the Treasury Department completed a public offering of its remaining shares in AIG, which AIG said were worth about $7.6 billion.