AIG posts 4Q profit; cutting about 1,900 jobs
NEW YORK, N.Y. - American International Group Inc. moved to a profit for its fourth quarter and increased its dividend, while saying that it is cutting 3 per cent of its workforce to better focus its business.
AIG took a $265 million severance charge during the quarter related to the reductions, which will primarily be in its property casualty business. The company would not say how many jobs will be cut or where they are located. Based on AIG's global workforce of 63,000, the jobs eliminated work out to about 1,900. The cuts were disclosed in a company memo.
The New York company got one of the biggest bailouts of the financial crisis but subsequently repaid the money and underwent a massive restructuring, shrinking its size by more than half to focus on its core insurance business. Bemosche said Thursday that the cuts are part of the company's ongoing transformation.
In the quarter that ended Dec. 31, AIG reported a net income of $1.98 billion, or $1.34 per share. That's compared with a loss of $3.96 billion, or $2.68 per share, a year earlier. The prior year included a $4.4 billion loss on the sale of its aircraft leasing business and $1.3 billion in after-tax losses tied to Superstorm Sandy. On an operating basis, the company earned $1.15 per share versus 20 cents per share.
Analysts polled by FactSet were anticipating earnings of 96 cents per share for the period.
AIG also said Thursday that it plans to buy back up to $1 billion of its shares and increase its quarterly dividend 25 per cent, to 12.5 cents. It resumed paying dividends last year after halting payments in 2008.
Shares of AIG rose 4 cents in after-hours trading. They closed up 55 cents at $49.59 Thursday, up about 28 per cent over the past 12 months.