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What to Expect From American International (AIG) Q1 Earnings?

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American International Group, Inc. (AIG - Free Report) is set to report first-quarter 2022 results on May 3, after the closing bell.

In the last reported quarter, the leading global insurance organization’s adjusted earnings per share of $1.58 beat the Zacks Consensus Estimate of $1.14, primarily due to solid underwriting performance and lower catastrophe losses from the General Insurance business. Further, lower total benefits, losses and expenses aided the results.

Let’s see how things have shaped up prior to the first-quarter earnings announcement.

Trend in Estimate Revision

The Zacks Consensus Estimate for first-quarter earnings per share of $1.24 has witnessed no movement in the past week. The estimated figure suggests an increase of 18.1% from the prior-year reported number. The consensus estimate for first-quarter revenues of $11.2 billion indicates a 5.1% increase from the year-ago reported figure.

American International beat the consensus estimate in each of the prior four quarters, with the average being 19.2%. This is depicted in the graph below:

Factors to Note

In General Insurance, net premiums earned are likely to have increased on the back of improved retention, new business and a continued improvement in the insurance premium rate. With improving consumer spending, net earned premiums are expected to have risen in the first quarter. The Zacks Consensus Estimate for net premiums earned in General Insurance is pegged at $6,445 million, indicating an increase from $5,866 million in the year-ago period.

Profits from General Insurance are expected to have increased significantly due to high retention rates and robust new business volumes. The Zacks Consensus Estimate for adjusted pre-tax income of $1,107 million for the first quarter indicates a rise from $845 million in the year-ago period, positioning the company for year-over-year bottom-line growth. The consensus mark for adjusted pre-tax income in Group Retirement indicates a 1.6% year-pver-year increase.

Total Premiums from Life and Retirement might have increased due to improved pension risk transfer activities. The Zacks Consensus Estimate for Premiums from Life and Retirement is pegged at $629 million, indicating an increase from $600 million in the prior-year period.

Its transformative program named AIG 200 is expected to have enabled the company to curb costs and expenses in the first quarter. This is likely to have provided the bottom line an additional boost in the quarter under review.

Yet, the consensus mark for adjusted pre-tax income from the Life and Retirement business is pegged at $902 million, signaling a decrease from $941 million in the prior-year quarter. This may partially offset the positives from the above-mentioned factors, making an earnings beat uncertain. Also, the consensus mark for adjusted pre-tax income from Individual Retirement signals a 6.4% year-over-year decline.

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’s Earnings ESP is -7.26%. This is because the Most Accurate Estimate is currently pegged at $1.15 per share, lower than the Zacks Consensus Estimate of $1.24.

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 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:

Armada Hoffler Properties, Inc. (AHH - Free Report) has an Earnings ESP of +2.84% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Armada Hoffler’s bottom line for the to-be-reported quarter indicates a 7.7% year-over-year rise. Armada Hoffler beat earnings estimates in each of the last four quarters, with an average of 8.1%.

American Equity Investment Life Holding Company (AEL - Free Report) has an Earnings ESP of +1.06% and is a Zacks #3 Ranked player.

The Zacks Consensus Estimate for American Equity Investment’s earnings per share for the to-be-reported quarter indicates a 120.9% year-over-year rise. American Equity Investment beat earnings estimates twice in the last four quarters and missed on the other two occasions, with an average surprise of 36.6%.

Cigna Corporation (CI - Free Report) has an Earnings ESP of +6.26% and a Zacks Rank #2.

The Zacks Consensus Estimate for Cigna’s bottom line for the to-be-reported quarter indicates an 8.5% year-over-year increase. Cigna beat earnings estimates in each of the last four quarters, with an average of 6%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.