American International Group Inc (NYSE:AIG) released its third quarter earnings report after closing bell tonight, posting earnings of $1.21 per share on $8.63 billion in revenue Analysts had been looking for earnings of $1.06 per share on $8.57 billion in revenue. In the same quarter last year, AIG reported adjusted earnings of 96 cents per share.
Diluted earnings per share were $1.52, compared to $1.46 per share in the same quarter last year.
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Key metrics from AIG’s earnings report
The insurance provider reported a 3% increase in net premiums in the third quarter, which rose to $8.95 billion. As of the end of September, American International Group shareholders had $108.6 billion in equity. The company’s book value per share rose 15% year over year to $77.35.Excluding accumulated other comprehensive income and deferred tax assets, book value per share rose 15% to $58.11.
AIG cut $2 billion off its direct investment book debt by redeeming $790 million of its 4.875% notes due 2016 and $1.25 billion of its 3.8% notes due the following year. Last month the company trimmed more off its debt by redeeming an additional $2 billion in 8.25% notes due 2018 and repurchasing about $450 million of its 5.45 medium-term notes.
AIG Parent reported $17.1 billion in liquidity sources as of the end of September. The company’s Property Casualty’s income rose 2% to $1.1 billion due to higher net investment income and better loss experience in Consumer Insurance. The company’s Commercial Insurance Underwriting business saw a .9 point increase in combined ratio due to improvements in the accident year loss ratio. The Consumer Insurance combined ratio fell 1.1 points due to a lower loss ratio.
AIG’s Life and Retirement saw an 18% increase in pretax operating income, which rose to $1.3 billion due to growth in assets under management and higher net investment income. The Mortgage Guaranty business saw its pretax operating income rose to $135 million for the third quarter due to lower first lien glaims and claims adjustment expenses and higher first lien net premiums.
American International Group repurchases shares
AIG bought back 24.8 million shares during the quarter, including 1.7 million the insurer received in July after it settled an agreement regarding accelerated share repurchases, which was executed in the previous quarter. AIG also repurchased through tender offers “certain high coupon hybrid and senior notes issued or guaranteed by AIG Parent.”
The company issued $1 billion in 2.3% notes during 2019 and $1.5 billion of 4.5% notes due 2044. Last month, the company issued $750 million more 4.5% notes also due 2044.