AIG Profits Down in Third Quarter
World's largest insurer's profits are down, despite analysts predictions.
American International Group, Inc.'s (AIG) profits fell 27 percent in the company's third quarter.
According to the Reuters web site, "Its mortgage insurance unit recorded an operating loss of $215 million, compared with a profit of $85 million a year earlier, due to the deterioration of the U.S. housing market, it said."
AIG's stock lost nearly one-quarter of its value, even though analysts expected the New York-based insurer to earn almost $2.00 a share.
According to the Houston Chronicle's web site, "AIG's $872.3 billion-investment portfolio saw losses of $864 million, and its credit swap portfolio lost $352 million. Its mortgage guaranty business also took a loss. Net income fell to $3.09 billion, or $1.19 per share, in the July to September period, from $4.22 billion, or $1.61 per share, in the same period last year."
In addition, the company has suffered an $864 million capital loss, including $529 million in valuation writedown charges. Of that sum, $149 million was related to an impairment of the company's mortgage-backed securities portfolio, yet back in August, AIG said it did not expect to accrue losses in relation to its subprime portfolio.
