American International Group (NYSE: AIG) on Thursday reported a fourth quarter loss caused in part by $2 billion in payouts tied to Super Storm Sandy and another big one-time charge related to the sale of its aircraft leasing unit.
The insurance giant, still recovering from near bankruptcy in the wake of the financial crisis of 2008, reported a net loss of $4 billion, or $2.68 per diluted share, for the period ended Dec. 31, versus net income of $21.5 billion, or $11.31 per diluted share, in the year-ago period.
AIG, which might have disappeared in bankruptcy if not for a massive government bailout, said its fourth quarter numbers were impacted by pre-tax catastrophe losses related to Sandy totaling $2 billion, or $1.3 billion after-taxes.
Net income for the fourth quarter also included a $4.4 billion net loss on sale from discontinued operations associated with an agreement to sell International Lease Finance Corporation (ILFC), which leases aircraft and which AIG deemed not a part of its core business. That sale reduced AIG’s book value per share by $2.97 per share, according to the insurance giant.
After-tax operating income in the fourth quarter was $290 million, or 20 cents per diluted share, compared with $1.5 billion, or 77 cents per diluted share, in the prior year quarter. AIG’s after-tax operating income for the full year 2012 was $6.6 billion, or $3.93 per diluted share, compared with $2.1 billion, or $1.16 per diluted share, in 2011.
“AIG's operating profit this quarter shows the power and financial strength of our diverse global franchise,” said AIG Chief Executive Robert H. Benmosche in a statement that accompanied the earnings report. “We achieved these operating profits in spite of Storm Sandy -- the second largest single catastrophe event for AIG in the U.S.”
Full year 2012 net income was $3.4 billion, or $2.04 per diluted share, the company said, compared with $20.6 billion, or $11.01 per diluted share, for the full year of 2011.
Wall Street analysts polled by Thomson Reuters forecasted a loss of 8 cents per share in the most recent quarter.
AIG shares rose nearly 5% in after-hours trading.