Seeking Alpha

AIG beats, boosts dividend and buyback

  • Quarterly dividend is boosted by 25% to $0.125 per share. The buyback is raised by $1B, bringing the total authorization to about $1.4B. 8.3M shares repurchased during Q for total price of about $405M. About $600M bought back for all 2013.
  • Book value per share (excl. AOCI) of $64.28 is up 11% from a year ago.
  • Continuing to cut costs, AIG takes a pre-tax severance charge of $265M in Q4 amid initiatives to centralize work streams into lower cost locations and creating a more streamlined organization.
  • P&C operating income of 1.09B compares to loss of $944M in the Sandy-affected quarter a year ago. Combined ratio improves to 103.8 from 125.1. Adjusted combined ratio deteriorated to 102 from 100.8.
  • Commercial insurance net premiums written of $4.8B is up 10% from a year ago, with the combined ratio improving to 107.7 from 130.3. Adjusted combined ratio deteriorates to 97.1 from 95.8.
  • Consumer Insurance net premiums written of $3.2B down 6% from a year ago. Adjusted combined ratio worsens to 103.6 from 101.3.
  • AIG Life and Retirement net investment income of $2.9B gains 6% from a year ago. Base investment yield of 5.29% slips 4 basis points.
  • Mortgage Guaranty pre-tax operating income of $48M vs. a loss of $45M a year ago thanks to declining delinquencies and increasing cure rates on delinquent inventory.
  • CC tomorrow at 8 ET
  • Press release, Q4 results
  • Shares +2% AH
Comments (11)
  • name999
    , contributor
    Comments (121) | Send Message
     
    Book value per share (excl. AOCI) of $64.28! Rounding the closed price today to $50, this means this stock is traded at an approx. 22% discount.<p class="double"> <... the dividend and buyback, the management just starts to return more capital to the shareholders.
    13 Feb, 04:21 PM Reply Like
  • WisPokerGuy
    , contributor
    Comments (782) | Send Message
     
    It doesn't get any better then this... Beats on the top & bottom. Dividend increase. Share buyback. And add to the fact that as @name99 mentioned above, the stock is still trading at a 20% discount to book value.

     

    Frankly, what more do you want? Thank you Mr. Benmosche. Job well done.
    13 Feb, 04:43 PM Reply Like
  • 14354582
    , contributor
    Comments (34) | Send Message
     
    AIG beats last time too and stock price went opposite direction. I wonder how it goes this time. So far aftermarket doesn't respond that much. It seems market doesn't care about book value.
    13 Feb, 04:52 PM Reply Like
  • xilef
    , contributor
    Comments (440) | Send Message
     
    They did not beat last quarter.
    13 Feb, 05:41 PM Reply Like
  • ComputerBlue
    , contributor
    Comments (682) | Send Message
     
    I hope it doesn't jump much..still a great buy in a inflated market.
    13 Feb, 04:55 PM Reply Like
  • BAHAMAS1
    , contributor
    Comments (1802) | Send Message
     
    Excluding AOCI, AIG is selling at 28.6% below BV not 20%.

     

    Great report articulated ( after hours on cnbc )by a Great ceo, Mr. Benmoshe.

     

    Long AIG
    13 Feb, 05:12 PM Reply Like
  • xilef
    , contributor
    Comments (440) | Send Message
     
    Great quarter from a good company. I thought we would test the 52week highs in aftermarket, but we are barely up. I'm assuming that major holders are waiting for the earnings call in the morning before making a more definitive move.
    13 Feb, 05:39 PM Reply Like
  • Rockerchris
    , contributor
    Comment (1) | Send Message
     
    What about the combined ratio? Looks like it is starting to erode book value upon first impression.
    13 Feb, 05:43 PM Reply Like
  • alsobirdman
    , contributor
    Comments (362) | Send Message
     
    Yep, AIG is one of my largest holdings. Bought @ $34 when they started repaying Uncle Sam. Wish I could go back and load up the truck at that price.
    13 Feb, 05:44 PM Reply Like
  • xilef
    , contributor
    Comments (440) | Send Message
     
    The way the company is going, you maybe saying the same thing about the current levels in a year or so.
    13 Feb, 06:04 PM Reply Like
  • ComputerBlue
    , contributor
    Comments (682) | Send Message
     
    Agreed.…still solid potential for a double from these levels for those w patience.
    13 Feb, 06:09 PM Reply Like
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