AIG Posts $5.36B Loss; Profits Wiped Out
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American International Group Inc., the world’s biggest insurer by assets, posted a $5.36 billion loss as writedowns tied to the housing slump wiped out profit for a third straight quarter. Shares fell 8.2% in extended trading.
The loss in the period ended June 30 equaled $2.06 a share, compared with profit of $4.28 billion, or $1.64, a year earlier, the New York-based company said yesterday in a statement. The loss excluding the declines in the value of some investments was $1.32 billion, or 51 cents a share, missing by $1.28 the average estimate of 19 analysts surveyed by Bloomberg.
“They’re still dealing with the environment for credit- default swaps, which is very difficult,” the chief investment officer of Fifth Third Asset Management in Cincinnati, Keith Wirtz, said. “Investment income is being pressured.”
The chief executive officer of AIG, Robert Willumstad, promised there are “no sacred cows” in his three-month review of AIG units as he tries to reverse a 50% stock slide this year and net losses in two previous quarters totaling $13 billion.