On an after-tax operating basis, the insurer posted EPS of $1.39, which included approximately $3.7 billion cash from the sale of 86.9 million shares of stock in AerCap Holdings N.V. (NYSE: AER) in an underwritten public offering. The company used the cash to repurchase $3.4 billion in aggregate debt for a purchase price of $3.7 billion. AIG also received about $410 million from the sale of 8.4 million shares of Springleaf Holdings Inc. (NYSE: LEAF).
AIG’s net income totaled $1.8 billion for the quarter, down from $3.1 billion a year ago.
In the second quarter of 2015, the company repurchased approximately 40 million shares of AIG common stock for an aggregate purchase price of $2.3 billion. Through the end of July the company repurchased about $965 million in additional common stock.
AIG did not offer third-quarter or full-year guidance, but the consensus estimates call for full-year EPS of $4.90 and the third-quarter EPS of $1.18.
Peter Hancock, the company’s CEO, said:
We continued to proactively manage our capital resources through both common stock and debt repurchases. We significantly reduced our non-core investments in both AerCap and Springleaf. These actions simplify our balance sheet and improve our risk profile. Our Board’s approval of an additional $5.0 billion share repurchase authorization, and a 124 percent increase in the quarterly dividend to $0.28 per share, highlights our commitment to shareholder return and our positive outlook for long-term profitability.
The company’s shares closed up about 0.5% on Monday and traded up fractionally in the after-hours market, at $64.16 in a 52-week range of $48.56 to $64.93. The consensus target price for the shares was around $66.63 before the report.
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