AIG earnings: $1.39 per share, vs $1.22 EPS estimate

AIG headquarters in New York City.
Adam Jeffery | CNBC

American International Group delivered quarterly earnings that topped analysts' expectations on Monday, driven by investments in one of China's biggest insurers and earnings from aircraft leasing company AerCap.

AIG reported second-quarter earnings of $1.39 a share on Monday, beating estimates of $1.22 a share. The company also raised its quarterly dividend and said it would buy back up to $5 billion in additional shares.

The largest U.S. commercial insurer boosted its quarterly dividend by 124 percent to 28 cents a share.

After-tax operating income in the company's insurance business rose to $1.9 billion from $1.8 billion a year ago. The operating income was bumped up by a more than doubling in pretax earnings to $127 million from AerCap Holdings NV, the world's largest independent aircraft lessor.

AIG, which is trying to exit AerCap, sold most of its 46 percent stake in early June.

However, AIG's underwriting operations continued to struggle with plummeting commercial property and casualty insurance rates.

AIG's earnings beat & buyback

Pretax operating profit fell 4 percent to $1.19 billion at the commercial property and casualty insurance business, traditionally AIG's forte. The company also paid out $88 million more in catastrophe losses.

"Our second-quarter results demonstrate our steadfast commitment to value-based management; we're taking action today to create long-term value for tomorrow," AIG CEO Peter Hancock said in the earnings release.

Shares rose modestly in after-hours trading.

Last Tuesday, the company said Douglas A. Dachille would succeed William N. Dooley as chief investment officer.

AIG added it is in the process of acquiring First Principles Capital Management, an investment management firm. The process is expected to be finalized sometime this quarter.

—CNBC's Fred Imbert and Reuters contributed to this report.