American International Group
rose 3% late Tuesday after the big insurer posted a 14% second-quarter earnings gain, excluding a charge related to its airplane leasing business.
For its second quarter ended June 30, the New York-based insurance giant earned $3.32 billion, or $1.27 a share, up from the year-ago $2.9 billion, or $1.10 a share.
Figures in both periods exclude realized capital gains and losses and certain hedging gains and losses, and the latest-quarter earnings exclude a $333 million charge for overpayments by plane makers. AIG made $1.14 a share including the International Lease Finance charge, up slightly on the year-ago $1.10. Including all the gains and losses, earnings surged 50% from a year ago to $4 billion, or $1.53 a share, up on the year-earlier $1.01 a share.
The news comes as AIG continues to grapple with the fallout of this spring's probe-provoked ouster of longtime chief Hank Greenberg. AIG restated past numbers and continues to review its own books in the wake of allegations that past management led by Greenberg orchestrated an effort to cook the company's books to keep its stock price up. Greenberg has denied all wrongdoing and sworn to defend himself vigorously.
"In a quarter where the company devoted significant time and attention to its internal review, our operations stayed focused on their customers and business, achieving good results," said CEO Martin Sullivan.
"Market conditions and other trends evident in the first quarter largely continued through the second quarter," Sullivan added. "Worldwide General Insurance, Foreign Life Insurance & Retirement Services and Consumer Finance were among our best performing businesses. A flat yield curve affected our spread businesses, and transaction volume in Domestic Life Insurance & Retirement Services and Capital Markets was lower as a result of regulatory and related issues.
"Our second quarter results were also adversely affected by the recording of a charge for the cumulative effect of the correction of an error relating to certain manufacturers' payments made for the benefit of ILFC," Sullivan said. "These factors were offset, however, by solid underwriting results and strong investment returns throughout our businesses."
Late Tuesday, shares of AIG rose $1.58 to $63.