American International Group (AIG) Down 0.4% Since Last Earnings Report: Can It Rebound?

A month has gone by since the last earnings report for American International Group (AIG). Shares have lost about 0.4% in that time frame, underperforming the S&P 500.Will the recent negative trend continue leading up to its next earnings release, or is American International Group due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts. AIG Delivers Q3 Earnings Surprise on Investment Income GrowthAmerican International Group reported third-quarter 2024 adjusted earnings per share of $1.23, which beat the Zacks Consensus Estimate by 8.9%. The bottom line improved 18.3% year over year.Adjusted operating revenues amounted to $6.84 billion, which declined 5.9% year over year. However, the top line beat the consensus mark by 3.3%.The better-than-expected third-quarter results were supported by higher returns on investments and lower costs. The positives were partially offset by lower premiums.Quarterly Operational UpdatePremiums of $5.9 billion declined 9.1% year over year in the quarter but beat the Zacks Consensus Estimate by 3.9%. Total net investment income increased 13.7% year over year to $973 million, attributable to increased income from fixed maturity securities, alternative investments and dividends received from Corebridge Financial. The metric beat the consensus mark by 11.2%. It now has a 48.6% ownership interest in Corebridge.Total benefits, losses and expenses fell 1.1% year over year to $6.1 billion. The year-over-year decline came on the back of lower policyholder benefits and losses incurred, and amortization of deferred policy acquisition costs. This was partially offset by higher general operating and other expenses.Adjusted return on equity of American International was 6.8%, which improved 150 basis points (bps) year over year.Segmental PerformancesGeneral InsuranceThe segment recorded net premiums written of $6.38 billion, which declined 1% year over year on a reported basis and rose 6% on a comparable basis. The metric benefited from Global Commercial Lines and Global Personal Insurancegrowth in the third quarter, partially offset by Validus Re divestiture.Underwriting income of $437 million declined 28% on a reported basis and 21% on a comparable basis. The metric was affected by increased catastrophe charges and decreased favorable prior-year development. Catastrophe-related chargesfell 9.7% year over year to $417 million. The combined ratio of 92.6% deteriorated 240 bps year over year.Adjusted pre-tax income declined 11% year over year to $1.21 billion, but beat the Zacks Consensus Estimate by 6%.Other OperationsNet investment income rose a whopping 178% year over year to $125 million in the third quarter due to a dividend income from Corebridge and improved income from the parent’s short-term investments.Interest expenses declined 17% due to a debt reduction. Adjusted pre-tax loss narrowed from $278 million to $143 million.Financial Position (As of Sept. 30, 2024)American International exited the third quarter with a cash balance of $1.47 billion, which dropped from $1.54 billion at 2023-end. Total assets of $169.45 billion declined from $539.31 billion at 2023-end.Long-term debt amounted to $9.89 billion, which declined from $10.38 billion at 2023-end.Total equity of $45.1 billion fell from $51.3 billion at 2023-end. Total debt to total capital was 17.9% at the third-quarter end, up from the 2023-end level of 16.8%.Adjusted book value per share declined 9.1% year over year to $73.90.Capital Deployment UpdateAmerican International rewarded its shareholders to the tune of repurchased shares worth $1.5 billion and distributed dividends of $254 million.How Have Estimates Been Moving Since Then?In the past month, investors have witnessed a downward trend in fresh estimates.The consensus estimate has shifted -6.12% due to these changes.VGM ScoresAt this time, American International Group has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.OutlookEstimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, American International Group has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.Performance of an Industry PlayerAmerican International Group belongs to the Zacks Insurance - Multi line industry. Another stock from the same industry, The Hartford (HIG), has gained 8.3% over the past month. More than a month has passed since the company reported results for the quarter ended September 2024.The Hartford reported revenues of $4.67 billion in the last reported quarter, representing a year-over-year change of +10.9%. EPS of $2.53 for the same period compares with $2.29 a year ago.For the current quarter, The Hartford is expected to post earnings of $2.69 per share, indicating a change of -12.1% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for The Hartford. Also, the stock has a VGM Score of A.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is among the most innovative financial firms. With a fast-growing customer base (already 50+ million) and a diverse set of cutting edge solutions, this stock is poised for big gains. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report American International Group, Inc. (AIG): Free Stock Analysis Report The Hartford Financial Services Group, Inc. (HIG): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks