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Friday, October 03, 2008
New AIG Chief Says To Focus On Core Insurance Business
John Spence
MarketWatch Pulse
BOSTON -- American International Group Inc.'s new chief executive on Friday said the company plans on focusing on and retaining its U.S. property and casualty operations, and its overseas general insurance busineses. It also plans on maintaining a stake in its foreign life insurance operations. "The company is exploring divestiture opportunities for its remaining high-quality businesses and assets and the proceeds from any divestitures will be used to repay the Federal Reserve loan and to address our capital structure going forward," said CEO Ed Liddy in his first call with investors and analysts. "Our goal is to emerge from this process in a timely fashion as a smaller, but more nimble company that is solidly profitable and has attractive, long-term growth prospects," he added. Selling the assets will involve "a deliberate and disciplined approach" and AIG will use "considerable judgment and flexibility in the process," Liddy said.
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Most folks judge the health of a business by the revenue that comes in through sales. But not all revenue is equal. Companies can grow their sales by buying other companies, which means you don't get a clear view of how the real sales trends are moving.
So, many analysts, particularly those who look at retail, try to gauge what¿s known as "organic" growth, by looking at same-store sales. These are sales only at outlets open more than a year, so the metric can exclude any sales jump that comes from opening new locations. Retailers release same-store sales (which are frequently called "comps" since they're a true comparison from the previous period) every month.
Retail, incidentally, isn't the only industry to look at same-store sales. Hospital companies, also use the metric, to gauge how existing hospitals are performing compared to ones they just built or acquired.
