Banking, finance, and taxes
AIG Keeps Chugging on Earnings and Share Buybacks
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American International Group Inc. (NYSE: AIG) led the week off and reported its second quarter earnings on Monday. The insurance giant has recovered since the recession, it has paid taxpayers back with a generous profit from the bailout, and it is still back in growth mode. AIG reported earnings of $1.25 per share, the after tax operating income attributable to AIG was $1.8 billion. The Thomson Reuters consensus estimate was $1.05 earnings per share.
AIG announced an additional share repurchase authorization of $2.0 billion, and they have repurchased $1.1 billion worth of shares. Book value per share of $75.71 grew 15% from June 30, 2013, while book value per share excluding accumulated other comprehensive income of $67.65 rose by 10% over the same period. AIG’s parent liquidity sources were $18.5 billion at the end of the second quarter. This includes $14.1 billion of cash and equivalents versus $15.6 billion at the end of March.
Guidance for the coming third quarter was not given, similar to most financial firms. Estimates for the following quarter are $1.06 earnings per share and $8.19 billion in revenues.
Going into the close, AIG’s chart felt a bit like a technical no-man’s land. Its 50 day moving average was up at $54.60 and the 200 day moving average was down at $51.20. During the first half of 2014, AIG tested its 200 day moving average on 8 different occasions.
AIG shares closed the day up over 1% at $52.66. Its 52-week range is $45.94 to $56.00. The after-hours reaction had shares initially up 3% at 54.40, but shares were up 2.35 at $53.85 in the after-hours after a few more minutes.
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As far as forward valuation AIG trades at close to 10.5 times expected 2015 earnings per share. This report was expected to be at least somewhat different now that AIG has named a new CEO, and this will likely be CEO Robert Benmosche’s last earnings release.
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