American International Group Inc (NYSE:AIG) shares rebounded Friday despite third-quarter results that revealed a significant earnings miss.
The insurance giant posted a profit of $0.56 per share, up from $0.34 a year earlier but well short of Street expectations for $1.00.
Shares initially dipped Friday morning, but recovered as the Dow Jones Industrials and S&P 500 indexes each neared record highs. AIG traded 0.34% higher at $53.10.
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AIG’s profits were dented by struggles in its Life and Retirement division, which saw pre-tax income from the business fall 9% to $646 million from $713 million a year earlier.
The biggest hit came from a $143 million charge it absorbed due to a review of actuarial assumptions, a process the insurance provider undergoes every third quarter.
Removing the actuarial effect, adjusted pre-tax income at the unit fell 3% because of elevated mortality and lower alternative investment returns.
The insurer’s underwriting loss in its general insurance business came in at $249, dramatically narrower than the $1.73 billion last year.
Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com
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