AIG profit beats estimates, boosts buyback by $5 bln
By Richa Naidu
(Reuters) - American International Group Inc (AIG.N: Quote), the largest commercial insurer in the United States and Canada, reported a quarterly operating profit that breezed past analysts' estimates, and boosted its share buyback by up to $5 billion.
Shares of the company, which more than doubled its quarterly dividend, were slightly higher in volatile after-market trading on Monday.
The results were primarily driven by investments in one of China's biggest insurers and earnings from the insurer's stake in aircraft lessor AerCap, but lower underwriting at most of its units caused concern.
S&P Capital IQ analyst Cathy Seifert said AIG only beat because of income from a company it had essentially taken off its balance sheet.
AIG, which has been trying to exit AerCap Holdings NV (AER.N: Quote), sold most of its 46 percent stake in the world's largest independent aircraft leasing company in June.
Pretax earnings from AerCap more than doubled to $127 million in the second quarter ended June, helping push AIG's operating income after tax to $1.9 billion, or $1.39 per diluted share.
AIG, which traces its roots to a two-room office in Shanghai in 1919, also gained $170 million from investments in the People's Insurance Group of China Ltd (1339.HK: Quote) and its subsidiary, PICC Property and Casualty Co Ltd (2328.HK: Quote).
Analysts on average had expected earnings of $1.22 per diluted share, according to Thomson Reuters I/B/E/S. Continued...