AIG Reports Big Loss, Would Share Buyback Program Support Price?
Shares of American International Group Inc. plummeted more than 4.5% late Tuesday after the multinational insurance corporation posted a fourth-quarter loss.
AIG reported a $3.04 billion net loss, or $2.96 a share in the three-month period to December, compared with a loss of $1.8 billion, or $1.50 a share, in the prior-year quarter. Furthermore, the insurance company also witnessed an after-tax operating loss of $2.8 billion, or $2.72 a share. This was far above the loss of the same period last year with $1.3 billion, or $1.07 a share, and analysts’ expectations for an adjusted per-share loss of 61 cents for the quarter.
The widening loss was due to a $5.6 billion, or $3.56 per share impact from prior year adverse reserve development.
Despite a weaker-than-expected earnings report, AIG’s board announced a $3.5 billion additional share-buyback program in order to keep AIG on track to return at least $25 billion in capital to its shareholders in 2016 and 2017.
Buy Limit at 63.50, Take profit 64.50, Stop loss at 63.00