American International Group Inc (AIG), the largest commercial insurer in the US and Canada, said profit declined 67 percent on costs to pay down debt and add to reserves.
Net income fell to US$655 million, or US$0.46 per share in the fourth quarter of last year, from US$1.98 billion or US$1.34 a year earlier, the New York-based insurer said on Thursday in a statement.
Operating profit, which excludes some results tied to investing and debt redemptions, was US$0.97 per share, falling short of the US$1.06 average estimate of 22 analysts surveyed by Bloomberg.
AIG chief executive officer Peter Hancock has been revamping management and working to improve results at the property-casualty operation after taking over in September last year.
AIG has been issuing new bonds at lower interest rates to repay higher-cost debt, and took a US$824 million charge tied to those efforts in the fourth quarter.
“We’ll look back and say 2014 was a transitional year and 2015 will show some operational progress,” Sanford C. Bernstein & Co analyst Josh Stirling said by telephone before results were announced.
The stock lost US$0.34 to US$52.11 at 4:49pm in New York, after results were announced. AIG advanced 9.7 percent last year, trailing the 11.4 percent gain of the Standard & Poor’s 500 Index.
The board authorized the repurchase of US$2.5 billion of stock, according to the statement, after AIG bought back US$4.9 billion of shares last year.
Book value, a measure of assets minus liabilities, rose to US$77.69 per share on Dec. 31 last year from US$77.35 three months earlier.
AIG said it issued US$750 million of 4.5 percent notes due in 2044 while repurchasing about US$2.8 billion in high-cost hybrid and senior notes in the fourth quarter. The company also cut debt tied to the direct investment book by US$2.5 billion.
Full-year profit fell to US$7.53 billion, 17 percent lower than in 2013, AIG said.
Net investment income slumped 6.1 percent to US$3.97 billion in the fourth quarter as hedge-fund performance deteriorated. Those holdings contributed US$86 million, down from US$446 million a year earlier, AIG said in a supplemental document on its Web site.
Private equity generated US$206 million, compared with US$286 million a year earlier. AIG mainly invests in bonds.
HORMUZ ISSUE: The US president said he expected crude prices to drop at the end of the war, which he called a ‘minor excursion’ that could continue ‘for a little while’ The United Arab Emirates (UAE) and Kuwait started reducing oil production, as the near-closure of the crucial Strait of Hormuz ripples through energy markets and affects global supply. Abu Dhabi National Oil Co (ADNOC) is “managing offshore production levels to address storage requirements,” the company said in a statement, without giving details. Kuwait Petroleum Corp said it was lowering production at its oil fields and refineries after “Iranian threats against safe passage of ships through the Strait of Hormuz.” The war in the Middle East has all but closed Hormuz, the narrow waterway linking the Persian Gulf to the open seas,
Apple Inc increased iPhone production in India by about 53 percent last year and now makes a quarter of its marquee devices there, reflecting the US company’s efforts to avoid tariffs on China. The company assembled about 55 million iPhones in India last year, up from 36 million a year earlier, people familiar with the matter said, asking not to be named because the numbers aren’t public. Apple makes about 220 million to 230 million iPhones a year globally, with India’s share of the total increasing rapidly. Apple has accelerated its expansion in the world’s most populous country in recent years, bolstered
HEADWINDS: The company said it expects its computer business, as well as consumer electronics and communications segments to see revenue declines due to seasonality Pegatron Corp (和碩) yesterday said it aims to grow its artificial intelligence (AI) server revenue more than 10-fold this year from last year, driven by orders from neocloud solutions clients and large cloud service providers. The electronics manufacturing service provider said AI server revenue growth would be driven primarily by the Nvidia Corp GB300 server platform. Server shipments are expected to increase each quarter this year, with the second half likely to outperform the first half, it said. The AI server market is expected to broaden this year as more inference applications emerge, which would drive demand for system-on-chip, application-specific integrated circuits
PROJECTION: TSMC said it expects strong growth this year, with revenue in US dollars projected to grow by about 30 percent, outperforming the industry Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reported consolidated sales last month reached NT$317.66 billion (US$9.98 billion), the highest ever for the month of February, driven by robust demand for chips built using the company’s advanced 3-nanometer (3nm) process. Last month’s figure was up 22.2 percent from a year earlier, but fell 20.8 percent from January, the world’s largest contract chipmaker said in a statement. For the first two months of the year, TSMC posted cumulative sales of NT$718.91 billion, up 29.9 percent from a year earlier. Analysts attributed the growth to sustained global demand for artificial intelligence (AI) products
RSS