UPDATE 1-AIG 4-qtr earnings miss estimates on low rates, refinancing
(Adds analyst comment, Hancock letter)
By Luciana Lopez
NEW YORK Feb 12 (Reuters) - American International Group Inc reported lower-than-expected fourth-quarter earnings on Thursday as low interest rates and refinancing expensive debt hurt the insurer's results.
The New York-based company, the largest commercial insurer in the United States and Canada, reported a 67 percent drop in net income to $655 million, or $0.46 per share for the quarter ended Dec. 31, compared with $2 billion, or $1.34 per share, a year earlier.
Analysts on average had expected earnings of $1.05 per share in the fourth quarter, according to Thomson Reuters I/B/E/S. On an operating basis, the company earned $1.4 billion, or $0.97 per share.
"In some respects it was a kitchen sink quarter. They did a lot of clean up work here," said S&P Capital IQ equity analyst Cathy Seifert.
AIG shares were down 1.6 percent at $51.62 after the bell.
AIG bought back expensive debt, leading to an after-tax loss of $824 million, or $0.58 per diluted share. Operating income was hurt by lower workers' compensation discount and total adverse prior-year reserve development.
AIG also declared a dividend of $0.125 per share and authorized the repurchase of up to $2.5 billion worth of shares. Continued...