American International Group Inc. (NYSE:AIG) will report
third-quarter earnings on Friday.
Credit Suisse Group AG (NYSE:CS) estimates
AIG will earn $4.50 a share, compared with a prior estimate of $1.40. "The insurer's book value per share, a measure of assets minus liabilities, may have increased 73% in three months to $38 as of Sept. 30 as previous unrealized investment losses reversed," Credit Suisse's Thomas Gallagher said, according to
Bloomberg.
Factors analysts and shareholders will be paying close attention to are how much the insurer gained and saved from asset sales. In order to pay off its
bailout, AIG has sold $12 billion in assets so far (
see list). However, newly appointed CEO Robert Benmosche has decided to hold onto some assets once potentially for sale. Analysts are likely to
ask about his strategy, considering all of his tough talk directed toward politicians and his plans to
drop restructuring adviser McKinsey & Co.
Also, the reports on credit default swaps profits will be interesting. The insurer reportedly r
eaped over $3 billion in payments from CDSs in recent months. CDSs were the undoing of AIG last year, and employees are still working to unwind the products. The portfolio was at
$1.3 trillion last quarter (down from $2.7 trillion at the time of AIG's bailout last year).
- Maria Woehr
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