(Updated with additional insight on writedowns and write-ups, as well as analysts commentary and stock movements.)
Still, the flailing insurer warned that any recovery would be slow and choppy, sending shares tumbling 9.6% to $35.54 in afternoon trading.
"We continue to focus on stabilizing and strengthening our businesses, but expect continued volatility in reported results in the coming quarters, due in part to charges related to ongoing restructuring activities," CEO Robert Benmosche said in a statement.One such charge is $5 billion in the fourth quarter related to the spin-off of its two major life insurance businesses. AIG is shedding American International Assurance and American Life Insurance as it looks to repay the massive $180 billion loan from the government. This outlook overshadowed AIG's profit of $455 million, or 68 cents a share, compared with a loss of $24.47 billion, or $181.02 a share, in the year-earlier quarter. These results include the government's portion of the profit. Excluding $1.95 billion in special gains, the flailing insurer actually earned $2.85 a share, easily topping Wall Street's forecast of $1.98 a share.