AIG Reports Much Deeper Loss than Expected

American International Groupreported a quarterly loss that was narrower than last year's shortfall but much deeper than analysts had expected. Shares dropped steeply in late trading.

The troubled insurance company, a regular target of criticism related to the U.S. government's economic bailout efforts, said it lost 97 cents a share on an adjusted basis in its fiscal first quarter. In the same period last year, AIG lost $1.41 a share.

Analysts who follow the company saw AIG reporting a loss of 6 cents a share, according to an average estimate from Thomson Reuters.

The adjusted figure excludes net realized capital losses and FAS 133 losses. FAS 133 relates to accounting for derivative instruments and hedging activities.

AIG shares were down about 4 percent in extended trading Thursday. The stock finished the regular New York Stock Exchange session up almost 6 percent at $1.95. Get after-hour quotes for AIG here.

Aig Headquarters
Aig Headquarters

On an unadjusted basis, AIG's first-quarter loss was equal to about $1.98 per share, according to a company statement, compared with an unadjusted loss of $3.09 per share in the same period a year ago.

The loss included $1.2 billion of costs related to AIG's wind-down of a controversial financial products unit, almost $1 billion of interest and costs related to a credit line from the Federal Reserve, and investment losses or writedowns of $1.6 billion.

AIG reported a $61.7 billion loss in the fourth quarter, the largest quarterly loss in corporate history.

The loss in the most recent quarter was primarily tied to costs from the winding down of its financial products unit, which was the at the center of its near collapse last fall. AIG was bailed out by the government, and has received a package of loans worth up to $180 billion to help the firm.

Looking to Sell Businesses

AIG, once the world's largest insurer, said its global general insurance business wrote $10 billion in net premiums during the quarter, a 17.5 percent decline. Premiums and other considerations also fell for its life insurance and retirement services division by about 10.5 percent to $8.3 billion.

The insurer, which operates in 130 countries around the world, is trying to line up some of these businesses for sale, potentially through initial public offerings.

The company said on Thursday it also plans to combine its U.S. life insurance and retirement services businesses, and re-brand the division to differentiate it from AIG, the parent company.

AIG has posted more than $100 billion in losses over the past six quarters stemming largely from excessive mortgage bets taken by a financial products unit.