American International Group (NYSE:AIG), the largest commercial insurer in the United States and Canada, more than doubled its quarterly dividend and lifted its share buyback target while reporting operating earnings that topped market expectations.
Operating profit, which excludes some investing results, was $1.39 per share, beating the $1.21 average estimate of 21 analysts surveyed by Capital IQ.
Overall, net income fell to $1.8 billion, or $1.32 per share, in the April-to-June quarter, from $3.07 billion, or $2.10 per share, a year earlier, the New York-based company said in a statement today.
AIG boosted its share buyback program by up to $5 billion and raised its quarterly dividend to $0.28 per share, payable September 28 to stockholders of record September 14.
"Our second-quarter results demonstrate our steadfast commitment to value-based management; we're taking action today to create long-term value for tomorrow," AIG chief executive officer Peter Hancock said in the statement.
The operating income was bumped up by a more than doubling in pretax earnings to $127 million from AerCap Holdings NV, the world's largest independent aircraft lessor.
AIG, which is trying to exit AerCap, sold most of its 46 percent stake in early June.
The insurer also gained $170 million from investments in the People's Insurance Group of China Ltd and its subsidiary, PICC Property and Casualty Co Ltd.
But AIG's underwriting operations continued to struggle with plummeting commercial property and casualty insurance rates.
At its commercial insurance segment, AIG earned premiums at property casualty fell 3 percent from last year to $5.1 billion, mortgage guaranty earned premiums were flat at $226 million, and institutional markets revenues surged 66 percent to $1.17 billion.
At its consumer insurance segment, retirement revenues rose 2 percent from last year to $2.47 billion, life revenues were up 5 percent at $1.63 billion, and earned premiums at personal insurance fell 7 percent to $2.81 billion.
Shares sank 3.3 percent to $62.04 at 10:11 a.m. in New York, paring this year’s gain to 11.4 percent.