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WSJ: AIG Expects $5 Billion Quarterly Net Loss

Source: WSJ


Posted on 06 May 2009

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The Wall Street Journal reported today that American International Group Inc. (AIG) is expected to post a first-quarter net loss of about $5 billion as the recession and further write-downs continue to erode its bottom line, according to people familiar with the matter.

The expected loss is considerably smaller than the $62 billion deficit AIG reported in the fourth quarter. The fourth-quarter loss was driven by charges to AIG's portfolio of distressed investments as well as interest payments and weakness in its insurance operations.

AIG has tools to manage big investment losses that other life insurers don't. The insurer has access to $30 billion it hasn't yet touched under the government's Troubled Asset Relief Program; other life insurers have had aid applications pending for months.

AIG shares have risen by one-third this week on expectations that the company won't require further federal assistance. The insurer's stock has more than quadrupled since it announced the terms of its revised bailout package in early March. Its shares traded hands Wednesday at $1.82 each, up more than 5%.


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