Updated for latest share price.
NEW YORK (TheStreet) -- American International Group's (AIG) fourth-quarter loss narrowed dramatically from year-ago levels, although the results were held back by restructuring expenses and a boost to reserves.
The stock tumbled on the news, falling almost 10% to $24.87 in recent trades. Volume of 23.2 milliuon was more than double the issue's trailing three-month average of 10.7 million.
The insurer lost $8.9 billion during the fourth quarter, or $65.51 per share, down from $61.7 billion, or $458.99 per share, in the same period a year earlier.The latest results included $9 billion in costs for early loan repayments and asset sales, as well as $2.3 billion in loss-reserve additions. For the full year, AIG lost $10.9 billion, or $90.48 per share, vs. $99.3 billion, or $756.85 per share, in 2008. AIG said some of its businesses "continued to stabilize" and improvements in the financial markets also helped core results. The company's general insurance unit, Chartis, reported a quarterly operating loss of $1.8 billion due to reserve building. It wrote $6.9 billion in net premiums, down 2.2% over last year. AIG's life insurance and retirement units brought in $2.1 billion in operating income. AIG's controversial financial services division, which led to the enormous government bailout, also eked out an operating profit of $92 million. "We are increasingly confident in how we see the mix of AIG's businesses over the long term," CEO Robert Benmosche said in a statement. "We are taking the right steps to regain our stature as one of the most respected and diverse property-casualty operations in the world, with a strong U.S. life and annuity operation and several other businesses." Benmosche cited AIG's "great progress" in moving forward as a new company, by paying down tens of billions of dollars in government debt and assessing which businesses are worth keeping. But his comments also raised some questions about two key businesses AIG had presumably been trying to sell: International Lease Finance Corp. and American General Finance. The former head of ILFC, Steven Udvar-Hazy, had reportedly been raising capital in an effort to spin off the business, but he left the firm earlier this month and it's unclear where those negotiations stand. S&P then downgraded ILFC's ratings to junk status, saying it doesn't believe AIG is still marketing the business for a sale in the near-term.
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