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What to Expect From American International's (AIG) Q3 Earnings?
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American International Group, Inc. (AIG - Free Report) is set to report its third-quarter 2022 results on Nov 1, after the closing bell.
In the last reported quarter, the leading global insurance organization’s adjusted earnings per share of $1.19 missed the Zacks Consensus Estimate by 3.3% due to reduced alternative investment income. This was partially offset by higher net realized gains on the Fortitude Refunds withheld embedded derivative and solid underwriting results within the General Insurance segment.
The Zacks Consensus Estimate for third-quarter earnings per share of 73 cents has witnessed no movement in the past week. The estimated figure suggests a decrease of 24.7% from the prior-year reported number. AIG beat the consensus estimate in three of the prior four quarters and missed once, with the average surprise being 11.1%. This is depicted in the graph below:
American International Group, Inc. Price and EPS Surprise
The Zacks Consensus Estimate for third-quarter revenues of $11.5 billion indicates a 1.4% decrease from the year-ago reported figure. Our estimate of $11.6 billion indicates a 0.9% year-over-year decrease.
Factors to Note
Improved retention, new business and continued growth in the insurance premium rate are likely to have increased net premiums earned in General Insurance for the third quarter. The Zacks Consensus Estimate for net premiums earned in General Insurance is pegged at $6,502 million, indicating an increase from $6,423 million in the year-ago period.
Total premiums from Life and Retirement are expected to have increased due to improved pension risk transfer activities. The Zacks Consensus Estimate for premiums from Life and Retirement is pegged at $1,105 million, indicating an increase from $1,041 million in the prior-year period. Our estimate for the metric is pegged at $1,080.3 million, suggesting 3.8% growth.
However, profits from General Insurance are likely to have decreased due to increased losses and loss adjustment expenses, as well as a lower net investment income. The Zacks Consensus Estimate for adjusted pre-tax income of $691 million for the third quarter indicates a decline from $811 million in the year-ago period, positioning the company for a year-over-year bottom-line fall. Our estimate suggests that the decline in General Insurance’s profits is expected to have reached 43.4% in the quarter under review, making an earnings beat uncertain.
Further, the consensus mark for adjusted pre-tax income in Group Retirement, a part of Life and Retirement, is pegged at $231 million, down from $316 million a year ago. Our estimate of $285.1 million indicates a 9.8% year-over-year decline due to increased total benefits, losses and expenses.
The consensus mark for adjusted pre-tax income for the overall Life and Retirement business is pegged at $884 million, signaling an increase from $877 million in the prior-year quarter. This is likely to have partially offset the negatives from the above-mentioned factors.
Its transformative program, named AIG 200, is expected to have enabled the company to curb costs and expenses in the third quarter. This is likely to have provided the bottom line some breathing room in the quarter under review.
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 -18.62%. This is because the Most Accurate Estimate is currently pegged at 59 cents per share, lower than the Zacks Consensus Estimate of 73 cents.
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:
The Zacks Consensus Estimate for Atlas’ bottom line for the to-be-reported quarter is pegged at 40 cents per share, which witnessed one upward estimate revision and no downward movement in the past 60 days. The consensus estimate for revenues is pegged at $436.8 million.
EverQuote, Inc. (EVER - Free Report) has an Earnings ESP of +4.88% and is a Zacks #2 Ranked player.
The Zacks Consensus Estimate for EverQuote’s bottom line remained stable over the past week. EVER beat earnings estimates in three of the past four quarters and missed once, with an average surprise of 24.6%.
Trean Insurance Group, Inc. has an Earnings ESP of +11.11% and a Zacks Rank of 3.
The Zacks Consensus Estimate for Trean Insurance’s bottom line for the to-be-reported quarter is pegged at 9 cents per share, which remained stable over the past week. The consensus mark for TIG’s revenues is pegged at $68.4 million, indicating 20.1% year-over-year growth.
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What to Expect From American International's (AIG) Q3 Earnings?
American International Group, Inc. (AIG - Free Report) is set to report its third-quarter 2022 results on Nov 1, after the closing bell.
In the last reported quarter, the leading global insurance organization’s adjusted earnings per share of $1.19 missed the Zacks Consensus Estimate by 3.3% due to reduced alternative investment income. This was partially offset by higher net realized gains on the Fortitude Refunds withheld embedded derivative and solid underwriting results within the General Insurance segment.
Let’s see how things have shaped up prior to the third-quarter earnings announcement.
The Trend in Estimate Revision
The Zacks Consensus Estimate for third-quarter earnings per share of 73 cents has witnessed no movement in the past week. The estimated figure suggests a decrease of 24.7% from the prior-year reported number. AIG beat the consensus estimate in three of the prior four quarters and missed once, with the average surprise being 11.1%. 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 third-quarter revenues of $11.5 billion indicates a 1.4% decrease from the year-ago reported figure. Our estimate of $11.6 billion indicates a 0.9% year-over-year decrease.
Factors to Note
Improved retention, new business and continued growth in the insurance premium rate are likely to have increased net premiums earned in General Insurance for the third quarter. The Zacks Consensus Estimate for net premiums earned in General Insurance is pegged at $6,502 million, indicating an increase from $6,423 million in the year-ago period.
Total premiums from Life and Retirement are expected to have increased due to improved pension risk transfer activities. The Zacks Consensus Estimate for premiums from Life and Retirement is pegged at $1,105 million, indicating an increase from $1,041 million in the prior-year period. Our estimate for the metric is pegged at $1,080.3 million, suggesting 3.8% growth.
However, profits from General Insurance are likely to have decreased due to increased losses and loss adjustment expenses, as well as a lower net investment income. The Zacks Consensus Estimate for adjusted pre-tax income of $691 million for the third quarter indicates a decline from $811 million in the year-ago period, positioning the company for a year-over-year bottom-line fall. Our estimate suggests that the decline in General Insurance’s profits is expected to have reached 43.4% in the quarter under review, making an earnings beat uncertain.
Further, the consensus mark for adjusted pre-tax income in Group Retirement, a part of Life and Retirement, is pegged at $231 million, down from $316 million a year ago. Our estimate of $285.1 million indicates a 9.8% year-over-year decline due to increased total benefits, losses and expenses.
The consensus mark for adjusted pre-tax income for the overall Life and Retirement business is pegged at $884 million, signaling an increase from $877 million in the prior-year quarter. This is likely to have partially offset the negatives from the above-mentioned factors.
Its transformative program, named AIG 200, is expected to have enabled the company to curb costs and expenses in the third quarter. This is likely to have provided the bottom line some breathing room in the quarter under review.
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 -18.62%. This is because the Most Accurate Estimate is currently pegged at 59 cents per share, lower than the Zacks Consensus Estimate of 73 cents.
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:
Atlas Corp. has an Earnings ESP of +10.00% 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 Atlas’ bottom line for the to-be-reported quarter is pegged at 40 cents per share, which witnessed one upward estimate revision and no downward movement in the past 60 days. The consensus estimate for revenues is pegged at $436.8 million.
EverQuote, Inc. (EVER - Free Report) has an Earnings ESP of +4.88% and is a Zacks #2 Ranked player.
The Zacks Consensus Estimate for EverQuote’s bottom line remained stable over the past week. EVER beat earnings estimates in three of the past four quarters and missed once, with an average surprise of 24.6%.
Trean Insurance Group, Inc. has an Earnings ESP of +11.11% and a Zacks Rank of 3.
The Zacks Consensus Estimate for Trean Insurance’s bottom line for the to-be-reported quarter is pegged at 9 cents per share, which remained stable over the past week. The consensus mark for TIG’s revenues is pegged at $68.4 million, indicating 20.1% year-over-year growth.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.