Banking, finance, and taxes
AIG Q2 Net Income Tumbled by More Than a Third
Published:
Last Updated:
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.
ALSO READ: How Obamacare Increased Insurance Coverage in Every State
Want to Retire Early? Start Here (Sponsor)
Want retirement to come a few years earlier than you’d planned? Or are you ready to retire now, but want an extra set of eyes on your finances?
Now you can speak with up to 3 financial experts in your area for FREE. By simply clicking here you can begin to match with financial professionals who can help you build your plan to retire early. And the best part? The first conversation with them is free.
Click here to match with up to 3 financial pros who would be excited to help you make financial decisions.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
