Reply #32: AIG profitable for second straight quarter [View All]

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11/6/09 AIG profitable for second straight quarter
The troubled insurer said it continues to benefit from stabilization in the housing and credit markets, but future quarters will continue to be volatile.

AIG reported its second profitable quarter in a row early Friday, as stabilization in the mortgage and credit markets helped boost results.

The troubled insurer said its net income rose to $455 million, or 68 cents per share, an improvement from a $24.5 billion loss from a year earlier. Results included a one-time net charge of $1.5 billion for restructuring and hedging.

Without the charge, AIG (AIG, Fortune 500) would have earned $1.9 billion in the quarter, or $2.85 per share. Analysts polled by Thomson Reuters, who typically exclude one-time events, forecasted earnings of $1.98 per share.

Sales for the New York-based company rose 189% to $26 billion, topping analysts' forecasts of $23 billion.

"Our results reflect continued stabilization in performance and market trends," said AIG Chief Executive Robert Benmosche in a statement. "AIG employees are working to preserve the strength of our insurance businesses in a challenging market."

In August, AIG reported that it had returned to profitability after six straight losing quarters, a stretch in which the company lost $99 billion.

Despite the encouraging numbers, AIG is still a very troubled company. The insurer has received $131.6 billion of a possible $182 billion bailout, and it still owes taxpayers $89.3 billion of that funding.

The insurer still has a sizeable portfolio of troubled assets that it is working to wind down, and it continues to sell off its assets in order to gain enough capital to repay the government.

Benmosche noted that future quarters will be volatile, as the company continues to take big write-offs for its asset sales.

http://money.cnn.com/2009/11/06/news/companies/aig/index.htm?postversion=2009110607