American International Group (AIG Quote) reported after Thursday's closing bell that it lost $7.81 billion in its first quarter due to heavy writedowns on credit-default swaps and mortgage-related investments.
The insurance giant became the latest in a long string of major U.S. financial institutions to shore up its financial position by raising about $12.5 billion fresh capital through a common stock offering and an equity-linked offering. "While we anticipated a difficult trading environment, the severity of the unrealized valuation losses and decline in value of our investments were beyond our expectations," said AIG CEO Martin Sullivan. AIG said it lost $3.09 a share, compared with earnings of $1.58 a share, or $4.13 billion, during the year-ago period. The results disappointed Wall Street, where analysts, on average, had expected a loss of 76 cents a share, according to consensus estimates reported by Thomson Reuters. Shares of AIG shed 93 cents, or 2.1%, to $44.14 during regular trading on Thursday after Standard & Poor's analyst Catherine Seifert slashed her earnings estimate for the Dow component to an operating loss of $1.10 a share, down from her previous estimate for earnings of $1.22 a share. In after-hours trading, the stock was rebounding, up 68 cents from its close. The company lost $9.11 billion on its credit-default swaps portfolio, and it lost $6.09 billion on investments tied to the mortgage market. It also lost $352 million on its mortgage insurance business, United Guaranty. AIG already took an $11.5 billion writedown in the value of its derivatives portfolio last year shortly after it assured investors that it had "little to no exposure" to asset-backed commercial paper, structured investment vehicles or collateralized debt obligations tied to residential mortgage-backed securities.- Loading Comments...
- Loading Comments...
Recent Comments
Featured Photo Galleries
-
U.S. Stocks Rally on Growing Prospects for Bailout of Greece
BusinessWeek Online
-
Google Adds 'Buzz' to Gmail
The Wall Street Journal.
-
Japan Airlines Decides to Stick With American Airlines
New York Times
-
UBS Returns to Profit but Clouds Linger
New York Times
-
Euro bounces back against dollar
BBC
-
Why fret about Greece?
The Economist
-
Ore Increases Boost Steel Prices
The Wall Street Journal.
-
Stiglitz Sees No Greek Default as ‘Speculative Attacks’ Persist
BusinessWeek Online
-
Tuesday Reads
The Big Picture
-
Bipartisan Health Reform Is Still Possible
Forbes.com: Business News
| Dow Jones | S&P 500 | NASDAQ | 10-Year Note | |
|---|---|---|---|---|
| 10,058.64 | 1,070.52 | 2,150.87 | 36.33 |
Oil *
72.02
|
|
UP
150.25
|
UP
13.78
|
UP
24.82
|
UP
0.41
|
10 Yr
3.63%
SPDR Gold
105.45
|
|
+1.52%
|
+1.30%
|
+1.17%
|
+1.14%
|
Data delayed 20 minutes |
More From TheStreet
Latest HeadlinesBrokerage Partners
Sponsored Links














