AIG resumes dividend, launches buyback
AIG stock is surging in after-hours trading after the company said it would resume paying a dividend and launched a stock buyback.
The insurer announced a 10-cent-per-share dividend and a $1 billion share buyback, a sign that the company has rebounded from the lows of the financial crisis.
"Clearly a dividend is important," CEO Robert Benmosche told CNBC. "It opens up new shareholders for our company."
AIG also reported stronger-than-anticipated earnings for the second quarter, helped by strength in its core insurance business. AIG's net income rose to $2.73 billion, or $1.84 per share, from $2.33 billion, or $1.33 per share, a year earlier.
Excluding items, AIG posted earnings per share of $1.12, up from 96 cents per share a year earlier, helped by a strong performance in its insurance businesses.
Insurance operating income rose 21 percent to $2.3 billion.
"Our property casualty, life and retirement, and mortgage insurance businesses all posted strong operating results," Benmosche said in a statement.
Revenue fell 5.4 percent to $8.35 billion, missing Street forecasts for $8.62 billion.
"All of our businesses are fundamentally producing good earnings, good revenues for this quarter," Benmosche told CNBC. "So it's really, it's a full story about—it's not just our investments. It's not just our property casualty business, it's not just life and retirement, not just mortgages. We're doing good across the board."
AIG also said that it has not yet closed on the sale of its International Lease Finance Corp. unit, but Benmosche told CNBC that it is continuing to have talks with the Chinese consortium that agreed to buy 80.1 percent of the airplane leasing business in December 2012.
"There's always a chance it won't go through," Benmosche added.
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