Updated from 8:02 a.m ET with early market action, a downgrade of AIG from Drexel Hamilton analyst Gloria Vogel and comments from other analsyts revealing mixed opinions of AIG. NEW YORK ( TheStreet) -- The early reaction to American International Group's ( AIG) third-quarter earnings report shows investors are disappointed with the company's continued underwriting losses in its Property Casualty unit. AIG following Thursday's market close reported third-quarter after-tax operating earnings of $1.421 billion, or 96 cents a share, declining from $1.621 billion, or 99 cents a share, during the third quarter of 2012. The company's third-quarter EPS matched the consensus estimate among analysts polled by Thomson Reuters. Despite a 12% year-over-year decline in after-tax operating earnings, AIG's earnings-per-share only dipped by 3% because of the company's continued share repurchases, which reduced the count of common shares to a weighted average of 1.475 billion in the third quarter from 1.643 billion during the year-earlier quarter. AIG's pre-tax operating income declined by 32% year-over-year to $1.709 billion in the third quarter, mainly reflecting extraordinary gains in the third quarter of 2012 of $527 million on the partial sale of AIA Group, and $330 million in gains on Maiden Lane III. Maiden Lane III was set up in 2008 by the U.S. Treasury and the Federal Reserve to purchase heavily discounted AIG credit default swaps as part of AIG's bailout by the federal government. The Fed sold the last of Maiden Lane III's portfolio in August 2012. AIG's bailout came to an end in December 2012, when the Treasury sold its last holdings of AIG shares and said "the overall positive return on the Federal Reserve and Treasury's combined $182 billion commitment to stabilize AIG during the financial crisis is now $22.7 billion." AIG reported a 38% year-over-year increase in pre-tax operating income within its Life and Retirement business to $1.144 billion, with significant increases in premiums and policy fees partially offset by a small decline in investment income. "Other income" within the Life and Retirement unit was up 39% year-over-year to $443 million. The Life and Retirement unit's improvement also reflected "positive adjustments netting to $118 million related to a review of estimated gross profit assumptions," according to the company. The company reported improved results in its Property Casualty (P&C) insurance unit, with an underwriting loss of $135 million during the third quarter, compared to an underwriting loss of $441 million during the third quarter of 2012. The P&C combined ratio improved to 101.6% during the third quarter from 105.0% a year earlier.