NEW YORK CITY (dpa-AFX) - American International Group Inc. (AIG), Thursday reported a slip to loss for the fourth quarter, hurt by steep losses arising from the sale of its airplane leasing business, International Lease Finance Corp., as well as catastrophe charges due to Superstorm Sandy. Meanwhile, results for the prior year included significant tax gains.
Excluding items, AIG reported a quarterly profit, while Wall Street expected the insurer to report an operating loss. Shares of the company are gaining over 4 percent in after-hours trade on the New York Stock Exchange.
'AIG's operating profit this quarter shows the power and financial strength of our diverse global franchise,' said CEO Robert Benmosche.
AIG incurred losses of $1.3 billion after-tax related to Sandy, which was the second largest single catastrophe event for AIG in the U.S. Sandy was estimated to have caused the insurance sector total loss of about $25 billion.
Results also include $4.4 billion net loss on sale from discontinued operations related to its December agreement to sell International Lease Finance Corp. to a Chinese investor group.
The New York-based company reported fourth-quarter net loss of $3.96 billion or $2.68 per share, compared with net income of $21.48 billion or $11.31 per share in the prior year, which included deferred income tax valuation allowance release of $19.25 billion.
Excluding one-time gains and losses, operating earnings for the quarter were $290 million or $0.20 per share, compared with $1.5 billion or $0.77 per share a year ago.
On average, 19 analysts polled by Thomson Reuters expected a loss of $0.08 per share for the quarter. Analysts' estimates typically exclude special items.
AIG Property Casualty business operating loss was $945 million, compared with profit of $367 million last year, and combined ratio worsened to 125.1 percent from 107.1 percent.
Excluding catastrophe losses, the division gained from improved underwriting margins and strong investment performance, as it continued to shift its mix to higher value products and regions. Net premiums earned slid 3.1 percent to $8.6 billion.
AIG Life and Retirement business operating income rose to $1.09 billion from $912 million a year ago, helped by higher net investment income, lower interest credited, and lower reserve charges for death claims. Premiums, deposits and other considerations were lower at $5.2 billion, compared with $5.9 billion a year ago.
Book value, a key metric calculated by assets minus liabilities, at the end of the quarter was $66.38 per share, up 24 percent from a year ago.
In December, the U.S. Treasury completed the offering of about 234.2 million of AIG common shares for about $7.6 billion, marking the end of government ownership in the insurer that was bailed out during the financial crisis.
With that offering, the federal government recovered a total of $205 billion, including principal, interest, and other gains, including a positive return of $22.7 billion. The Treasury currently has 2.7 million AIG shares held in warrants.
AIG also sold its remaining stake of about 1.65 billion ordinary shares of AIA Group Limited (AIA) recognizing gross proceeds of about $6.5 billion and a gain of $240 million.
AIG closed Thursday at $37.25, down 0.85%, on a volume of 19 million shares on the NYSE. In after-hours, the stock gained $1.57 or 4.21%. In the past year, the stock trended in a range of $27.18 - $39.90.
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