AIG operating results beat expectations, shares rise after-hours trading
Insurer American International Group Inc (AIG) reported fourth-quarter results that beat Wall Street expectations, although Chief Executive Robert Benmosche said some employee bonuses will be smaller this year because the company did not meet all of its performance targets.
Overall, the company reported a $4 billion loss on Thursday, due mainly to the sale of aircraft leasing business ILFC, as well as losses incurred from Superstorm Sandy.
But AIG's underlying business trends - with higher investment income across two key insurance units and stronger underwriting margins in its property and casualty business - helped lift operating earnings above what analysts expected.
Last year marked an important milestone for AIG, which was rescued by US taxpayers in 2008 with a bailout that eventually exceeded $180 billion. The US government, which took a stake in the insurer in exchange for the bailout, exited nearly its entire investment in the company in 2012.
The Treasury Department still holds warrants to purchase about 2.7 million shares, but sold the remainder of its common stock last quarter. The Federal Reserve also sold off its holdings in an AIG-bailout related vehicle in 2012.
The bailout exit lifted some uncertainty for investors and AIG replaced Apple Inc in the fourth quarter as the hedge fund industry's favorite stock.
AIG came under enormous public pressure to slash bonuses while taxpayers were supporting the company. As recently as last month, the watchdog office of the Treasury Department's bailout program said the agency had approved excessive pay for executives at bailed-out companies - including AIG -
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