Yahoo Finance American International (AIG) to Post Q1 Earnings: What to Expect
American International Group, Inc. AIG is set to report its first-quarter 2023 results on May 4, after the closing bell.
What Do the Estimates Say?
The Zacks Consensus Estimate for first-quarter earnings per share of $1.43 has witnessed no upward estimate revision in the past 30 days against three movements in the opposite direction. The estimated figure, however, suggests an increase of 10% from the prior-year reported number. Our estimate of $1.36 per share indicates a 5% year-over-year increase.
American International beat the consensus estimate in three of the prior four quarters and missed once, with the average being 6.9%. This is depicted in the graph below:
American International Group, Inc. Price and EPS Surprise
American International Group, Inc. price-eps-surprise | American International Group, Inc. Quote
The Zacks Consensus Estimate for first-quarter revenues of $11,350 million indicates a 3.3% increase from the year-ago reported figure while our estimate also suggests 3.3% growth.
Before we get into what to expect for the to-be-reported quarter in detail, it’s worth taking a look at AIG’s previous-quarter performance first.
Q4 Earnings Rewind
In the last reported quarter, the leading global insurance organization’s adjusted operating earnings of $1.36 per share beat the Zacks Consensus Estimate by 14.3% due to solid North America Commercial Lines growth and improved underwriting income in General Insurance. However, the positives were partially offset by reduced alternative investment income, higher expenses and losses due to the winter storm.
Now let’s see how things have shaped up prior to the first-quarter earnings announcement.
Q1 Factors to Note
In the first quarter, improved retention, new business and continued growth in the insurance premium rate are likely to have boosted the performance of the General Insurance business. The Zacks Consensus Estimate for net premiums earned in General Insurance is pegged at $6,464.5 million, indicating a 3.3% increase from the year-ago period, whereas our estimate predicts a 6.1% jump.
Profits from General Insurance are likely to have increased due to strong North America operations. The Zacks Consensus Estimate for adjusted pre-tax income of $1,346.8 million for the first quarter indicates an increase of 11.2% from the year-ago period, whereas our estimate predicts a 24.8% surge.
The effects of its transformative program, named AIG 200, are expected to have enabled the company to further curb costs and expenses in the first quarter. This is likely to have provided the bottom line some breathing room in the quarter under review. Our estimate for total expenses indicates around 21% year-over-year decline, which is likely to have positioned the company for year-over-year growth.
However, both the Zacks Consensus Estimate and our estimate for net investment income indicate a 5.8% decline from the year-ago period, despite a high interest environment. This is likely to have been caused by a reduction in alternative investment income.
Moreover, the consensus mark for adjusted pre-tax income for the overall Life and Retirement business is pegged at $694.9 million, signaling a decrease of 4% from the prior-year quarter. Our estimate also suggests a significant drop in Life and Retirement profits, making an earnings beat uncertain in the first quarter.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for American International this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is not the case here, as you will see below.
Earnings ESP: The company has an Earnings ESP of -5.50%. The Most Accurate Estimate is currently pegged at $1.35 per share, lower than the Zacks Consensus Estimate of $1.43.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: American International currently carries a Zacks Rank #3.
Stocks to Consider
While an earnings beat looks uncertain for American International, here are some companies in the broader Finance space that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this time around:
Unum Group UNM has an Earnings ESP of +0.30% and a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for UNM’s bottom line for the to-be-reported quarter is pegged at $1.65 per share, suggesting a 21.3% jump from the year-ago figure. Unum beat earnings estimates in three of the past four quarters and missed once, with an average surprise of 32.3%.
Owl Rock Capital Corporation ORCC has an Earnings ESP of +0.47% and is a Zacks #2 Ranked player.
The Zacks Consensus Estimate for Owl Rock Capital’s bottom line for the to-be-reported quarter is pegged at 43 cents per share, implying a 38.7% jump from the year-ago figure. ORCC beat earnings estimates in three of the past four quarters and missed once, with an average surprise of 2.1%.
RenaissanceRe Holdings Ltd. RNR has an Earnings ESP of +3.37% and a Zacks Rank of 3.
The Zacks Consensus Estimate for RenaissanceRe’s bottom line for the to-be-reported quarter is pegged at $7.34 per share, suggesting a 109.7% year-over-year increase. RNR beat earnings estimates in two of the past four quarters and missed on the other two occasions.
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American International Group, Inc. (AIG) : Free Stock Analysis Report
RenaissanceRe Holdings Ltd. (RNR) : Free Stock Analysis Report
Unum Group (UNM) : Free Stock Analysis Report
Owl Rock Capital Corporation (ORCC) : Free Stock Analysis Report
