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AIG Announces $3 Billion Buyback as Asset Sales Boost Profit

  • Operating profit of 98 cents a share beats analyst estimates
  • Results include pretax $928 million gain on PICC P&C shares

American International Group Inc. said it will buy back $3 billion of stock after second-quarter profit climbed 6.3 percent, helped by asset sales. The insurer climbed in extended trading in New York.

Net income advanced to $1.91 billion, or $1.68 a share, from $1.8 billion, or $1.32, a year earlier, New York-based AIG said Tuesday in a statement. Operating profit, which excludes some investment results, was 98 cents a share, beating by 6 cents the average estimate of 20 analysts surveyed by Bloomberg.

Chief Executive Officer Peter Hancock has been selling assets and slashing jobs to boost margins after posting losses for three straight periods through the first quarter. He announced a plan in January to return $25 billion to shareholders over two years. The next month, AIG agreed to give board representation to Carl Icahn and John Paulson, the activists who pressured Hancock to split up the company and focus on property-casualty operations. Icahn said last week that he’s had friendly discussions with the CEO about speeding up asset sales.

“AIG’s second-quarter results show strong improvement towards all the goals the board and I announced in January,” Hancock said in the statement.

The insurer advanced 3.4 percent to $56 at 5:17 p.m. in New York. AIG, which reported results markets closed, had slipped 13 percent this year as of 4 p.m. in New York, compared with the 5.5 percent gain in the S&P 500 Index.

Share Buybacks