AIG (NYSE: AIG): Q1 Earnings Preview 2011

American International Group Inc. (NYSE: AIG) is scheduled to release its first-quarter earnings after the closing bell on Thursday, May 5, 2011. Analysts, on average, expect the company to post a loss of 15 cents per share on revenue of $14.97 billion. In the year ago period, the company reported a profit of $1.75 per share on revenue of $16.81 billion.

American International Group, Inc., through its subsidiaries, provides insurance and related services in the United States and internationally.  AIG's four reportable segments include: General Insurance, Domestic Life Insurance & Retirement Services, Foreign Life Insurance & Retirement Services, and Financial Services.

AIG was bailed out in 2008 by the U.S. government, which committed more than $180 billion to stabilize the insurance giant in the midst of the global financial crisis. Over the last year, the company has raised tens of billions of dollars through asset sales and IPOs of international units as it slimmed down and shifted focus.

In the preceding fourth-quarter, the New York-based company's net income was $11.18 billion, compared to a loss of $8.87 billion in the previous year. On a per share basis, net income for the quarter was $16.60, compared to a loss of $65.51 last year. Results for the quarter include a $4.2 billion net charge to strengthen Chartis loss reserves, gains of $17.6 billion from the sale of divested businesses and a gain of $4.1 billion from the sale of American Life Insurance Company.On an adjusted basis, net loss for the quarter widened to $2.21 billion or $16.20 per share from $1.34 billion or $9.88 per share a year ago. 

AIG has restructured itself and sold off a couple of businesses which were not deemed a part of its core insurance business. Its credit ratings and sales have also improved. 

During the quarter in review, the company sold 146.8 million shares of Metlife common stock and $3 billion of MetLife equity units, which it received as stock proceeds from the sale of its insurance subsidiary, American Life Insurance Co, or ALICO, to life insurer Metlife, Inc. (MET: News ) that was completed in November.

Early in March, AIG repaid about $6.9 billion to the U.S. Department of the Treasury, thus reducing the government's stake in the company. So far in 2011, AIG has paid about $36 billion to the Treasury in four major payments. The Treasury still holds about $11.3 billion of preferred interests in the company.

Last month, the company said that it expects $1 billion in catastrophe losses in the first quarter. The earthquake and tsunami that hit Japan on March 11 will account for $700 million of those losses, the insurer said. The company noted that the $1 billion number was a preliminary estimate that also includes losses related to the New Zealand earthquake, U.S. winter storms, northeast Australian floods, Cyclone Yasi, and the Brazil floods that have occurred in the first quarter so far. The loss is 1.1% of total AIG shareholders' equity at the end of 2010, the insurer added.

Full Disclosure: None.

American International Group, Inc. (NYSE: AIG): Q4 Earnings Preview 2010

American International Group Inc. (NYSE: AIG) is scheduled to release its fourth-quarter earnings after the closing bell on Thursday, February 24, 2011. Analysts, on average, expect the company to post a loss of $16.98 per share on revenue of $13.99 billion. In the year ago period, the company posted a loss of $53.23 per share on revenue of $24.36 billion.

American International Group, Inc., through its subsidiaries, provides insurance and related services in the United States and internationally.  AIG's four reportable segments include: General Insurance, Domestic Life Insurance & Retirement Services, Foreign Life Insurance & Retirement Services, and Financial Services.

AIG was bailed out in 2008 by the U.S. government, which committed more than $180 billion to stabilize the insurance giant in the midst of the global financial crisis. Over the last year, the company has raised tens of billions of dollars through asset sales and IPOs of international units as it slimmed down and shifted focus.

In the preceding third quarter, the New York, NY, United States-based company's net loss was $2.4 billion, or $17.62 a share, compared to a profit of $455 million, or 68 cents a share, in the year-ago quarter. On an adjusted basis, the company reported a loss of $1.47 a share in the latest quarter. Revenue slipped to $19.09 billion from $19.60 billion in the same quarter last year. Analysts, on average, expected the company to report earnings of $1.35 per share on revenue of $14.1 billion.

AIG has been working vigorously to attain liberation from the US government and to eliminate redundant operations in order to concentrate on its core global life and property-casualty insurance businesses. The company has been selling businesses to repay a massive bailout by the U.S. government. Last month, American International Group Inc. said it has signed a deal to sell its Taiwanese unit Nan Shan Life Insurance Co. for $2.16 billion in cash. In January, the company also closed the sale of its Japan-based life insurance subsidiaries, AIG Star Life Insurance Co., Ltd. and AIG Edison Life Insurance Co., to Prudential Financial, Inc.

In November, AIG raised nearly $37 billion in cash between the sale of Alico and the successful public offering of AIA in Hong Kong. In a deal that closed last month, the company used those proceeds to pay off the Fed loan. At the same time, the Treasury converted its preferred shares in the company into 1.66 billion shares of common stock, giving the government a 92 percent stake in AIG that the Treasury plans to sell over the next two years. The company is expected to launch a stock offering in coming months to help the Treasury Department start selling its 92% stake in the company. The company is targeting this March for the first share sale, but due to the complexity of the situation a sale in May was more likely. The amount to be sold is yet to be determined and will depend on AIG's share price at the time.

AIG’s sell-down of the US governments stake in its business was met with approval from Moody’s rating services who have announced that such a move would be a credit positive for the insurer. Also clients and distributors are more willing to transact with an insurer able to stand on its own than with one reliant on government support, it added.

In January, AIG also issued warrants to its non-government stockholders enabling them to buy shares at $45.

Recently, AIG said that it would record a fourth-quarter $4.1 billion charge to strengthen loss reserves in its Chartis property and casualty insurance subsidiaries. The charge would be net of $446 million in discount and loss sensitive business premium adjustments. To help fund the charge, the U.S. Treasury has allowed AIG to retain $2 billion of the net cash proceeds from its recent sale of AIG Star Life Insurance. Increasing the Chartis loss reserves reflects an adverse development on prior accident years for asbestos, excess casualty, excess workers' compensation, and primary workers' compensation, which comprises about 80% of the total charge.

Among other developments, AIG's global insurance subsidiary, Chartis, recently said that it will buy the remaining shares of Fuji Fire and Marine Insurance Co. for 47 billion yen ($571 million) to bolster its Japanese insurance business.

In January,  Robert Benmosche, the American International Group Inc. chief executive officer battling cancer, said he expects to remain on the job until next year after doctors gave him “an encouraging prognosis.” Mr Benmosche, who first disclosed his illness in October 2010, has said he is undergoing aggressive treatment for the disease. He has pledged to remain with the company until the government sells its stake, should his condition allows it.

Full Disclosure: None.