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Third-quarter profit at American International Group (AIG) - Get American International Group Inc. Report fell, missing analysts' estimates, as mortgage and credit conditions hurt results.

AIG said net income for the quarter ended Sept. 30 fell to $3.09 billion, or $1.19 a share, from $4.22 billion, or $1.61 a share, a year earlier.

Excluding items, the insurance giant earned $1.44 a share, missing analysts' consensus estimate of $1.62 a share, as compiled by Thomson Financial.

The company's investment portfolio posted a loss of $864 million, including impairments of approximately $149 million related to AIG's residential mortgage-backed securities portfolio.

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Despite the volatility of the recent quarter, AIG's exposure to the residential mortgage-backed securities market within the investment portfolios "remains high quality and with substantial protection through collateral subordination."

Shares of AIG, which lost nearly 7% in the regular session, lost 2.5% in recent after-hours trading to $56.46.

The stock has plunged about 20% in the past month.