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AIG Profit Rises

Subprime mortgages hit the bottom line, though.

American International Group's

(AIG) - Get American International Group, Inc. Report

profit soared 29% in the first quarter, even as tighter mortgage lending standards hit the bottom line.

The New York-based company made $4.13 billion, or $1.58 a share, for the latest quarter. Excluding certain items, AIG's adjusted net income was $4.4 billion, or $1.68 a share.

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Analysts were expecting the company to earn $1.54 a share, according to Thomson Financial.

AIG's general insurance operations, its largest business contributor, underwrote $12.1 billion in net premiums last quarter, up 7.6% from a year ago. Underwriting profit rose 23.3% to $1.4 billion, while net investment income in the unit rose 39.8% to $1.5 billion.

Profit from AIG's consumer finance business fell 57.7% to $74 million.

The company took a $128 million pretax charge in the quarter in anticipation of lower profits on its nonprime mortgage business, due to tighter lending standards. AIG is in "ongoing discussions" with the Office of Thrift Supervision relating to loans originated from July 2003 through last May at its savings bank, it says.

Shares fell 50 cents in after-hours trading to $71.70.