American International Group Inc. (AIG - Analyst Report) reported third-quarter 2014 operating earnings per share (EPS) of $1.21, which outpaced the Zacks Consensus Estimate of $1.08 by 12% and the year-ago quarter EPS of 96 cents by 26%. With this result, the company kept its earnings streak alive and marked four straight quarters of earnings beat averaging 15.7%.
American International Group, Inc – Quarterly EPS (BNRI) | FindTheBest
Operating net income escalated 22.8% year over year to $1.75 billion primarily on improved performance across core segments, lower claims and interest expenses as well as higher net realized gains and investment income. These positives were partially offset by higher loss on extinguishment of debt and tax expenses.
On a GAAP basis, including extraordinary items, AIG reported a quarterly net income of $2.19 billion or $1.54 per share, compared with $2.17 billion or $1.47 per share in the year-ago quarter.
Total revenue climbed 4.5% year over year to $16.65 billion. Modest growth was generated from premiums, fees, investment income, net realized gains and others. These were partially offset by absence of revenues from aircraft leasing, which was $1.12 billion in the year-ago quarter.
Meanwhile, total benefits, claims and expenses decreased 7.7% to $13.64 billion, primarily due to lower claims, benefits and interest expenses as well as nil aircraft leasing expenses.
Segment Details
AIG Property Casualty (P&C) – conducted through Chartis and its sub-segments: Commercial & Consumer Insurance – reported pre-tax income of $1.21 billion, up 7.2% from the year-ago quarter. The upside resulted from higher premiums, net realized gains and investment income, partially offset by higher claims, operating and acquisition expenses as well as catastrophe losses. However, underwriting loss widened to $169 million from $134 million in the year-ago quarter.
Meanwhile, investment income rose 4.3% year over year to $1.27 billion. Net premiums written also grew 3.4% to $8.95 billion, while net premiums earned improved 2.4% to $8.63 billion. While premiums improved in mid-single digits in commercial insurance, these remained flat in the consumer, while pre-tax catastrophe losses amplified to $284 million from $222 million in the year-ago quarter. Subsequently, combined ratio deteriorated marginally to 102% from 101.6% in the year-ago quarter.
