Insurer American International Group lost more than $4 billion in the third quarter, as its aircraft leasing unit took an impairment charge on a portion of its fleet and the fair value of the company's one-third stake in Asian insurer AIA fell.
It was the 10th time in the last 15 quarters, dating to 2008, that AIG lost at least $1 billion.
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Shares fell 3.2 percent in after-hours trading after the company announced its financial results, then rebounded a bit after AIG said it would launch a $1 billion share buyback.
AIG's core insurance businesses were profitable on an operating basis, and its mortgage insurance unit both raised prices and gained market share amid difficulties in that industry.
But those results were not enough to overcome the charges, which were partially driven by declining equity and debt markets during the quarter.
AIG reported a loss of $4.11 billion, or $2.16 per share, compared with a year-earlier loss of $2.52 billion, or $18.53 per share. In the year-earlier period AIG took a number of charges on asset sales; it also had a smaller share count.
On an operating basis AIG lost $3.04 billion, or $1.60 per share.
Analysts polled by Thomson Reuters I/B/E/S had on average expected a loss of 63 cents per share in the quarter, though the range of estimates was wide, from a loss of 22 cents to a loss of 99 cents.
IMPAIRED PLANES, SHARES
AIG said that ILFC, its plane leasing business, took a $1.5 billion impairment on 95 planes as customers' appetites shifted toward newer, more fuel-efficient aircraft.
Last February, Chief Executive Bob Benmosche said he did not expect any further large charges for the business this year, after it took roughly $1 billion in write-downs in the last six months of 2010.
AIG said it lost $2.3 billion on the declining fair value of its stake in AIA during the third quarter. AIG took AIA public late last year in Hong Kong. It recently became eligible to start selling AIA shares after the IPO lockup expired.
AIG has also filed to take ILFC public.
Proceeds from the sale of AIA shares and from any ILFC IPO are already earmarked to pay back some of the U.S. Treasury's remaining $50 billion interest in the company.
The government rescued AIG from the brink of bankruptcy in September 2008, at a price tag that exceeded $182 billion. The Treasury still owns a 77 percent stake in what was once the world's largest insurance company.
In the third quarter, AIG also had substantial catastrophe losses totaling $574 million, mostly because of Hurricane Irene and Tropical Storm Lee.
Beyond the charges, though, AIG said its insurance units had posted nearly $900 million in pretax operating income.
Property insurer Chartis saw net premiums written rise nearly 1 percent, though the gain was attributable to foreign exchange benefits. Pricing improved in its U.S. commercial business, echoing similar results from other insurers as the market rebounded.
SunAmerica's life insurance sales rose 14 percent, while assets under management also rose. (Reporting by Ben Berkowitz)