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AIG Loss Wider than Expected; Shares Plunge

American International Group reported a larger-than-expected quarterly loss, and the company's shares fell sharply in late trading.

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The insurance giant and component of the Dow Jones Industrial Average said Thursday its first-quarter net loss was $1.41 a share, excluding one-time items, compared with net income of $1.68 a share, a year earlier.

Sales for the most recent period fell 54 percent to $14.03 billion from $30.65 billion.

AIG was seen reporting a loss of 76 cents a share on a topline fo $31.03 billion, according to a consensus estimate compiled by Thomson Financial.

Estimates for the company varied widely, ranging from a loss of $2.32 a share to a profit of 97 cents a share.

Shares of AIG were down about 7 percent in extended electronic trading. They closed Thursday 2.06 percent lower at $44.15 and were halted for about 45 minutes after the bell.

The results marked the second consecutive quarter that AIG had posted record losses, hurt by a write-down of derivatives exposed to bad mortgage investments.

New York-based AIG lost $9.11 billion in its credit-default swaps portfolio, which promise to cover losses on $579 billion in bonds or other kinds of debt.

Losses in its investment portfolio, which includes debt backed by troubled mortgages, totaled $6.09 billion.

AIG says it lost $352 million in its mortgage insurance business, United Guaranty.

Separately, the company said it was looking for a new CFO after naming Steven Bensinger vice-chairman of financial services, effective immediately.

The company also reported plans to raise about $12.5 billion in capital to fortify its balance sheet.

AIG said it expected to raise $7.5 billion of the total capital through a common stock and equity-lined offering.

The equity units will consist of subordinated debt securities and contracts that require the holders to purchase AIG stock at a future date.

No pricing for the offerings was disclosed.

Separately, the board of directors approved a 2-cent per share, or 10 percent boost to its quarterly cash dividend, to 22 cents. The dividend will be paid Sept. 19 to shareholders of record on Sept. 5.

AIG's stock tumbled 26 percent during the first quarter to close March at $43.25. The stock has lost a third of its value in the past year.

- Wire copy contributed to this report.