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Can American International's (AIG) Q4 Earnings Beat Estimates?
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American International Group, Inc. (AIG - Free Report) is set to continue its earnings beat streak in the fourth quarter of 2022, the results of which are expected to be released on Feb 15, after the closing bell.
In the last reported quarter, the leading global insurance organization’s adjusted operating earnings of 66 cents per share beat the Zacks Consensus Estimate by 11.9% due to solid performance in General Insurance despite the negative impacts of Hurricane Ian, and increased Life and Retirement premiums. However, the positives were partially offset by reduced alternative investment income and higher expenses.
Now, let us see how things have shaped up prior to the fourth-quarter earnings announcement.
The Trend in Estimate Revision
The Zacks Consensus Estimate for fourth-quarter earnings per share of $1.19 has witnessed one upward estimate revision in the past 30 days against no movement in the opposite direction. The estimated figure, however, suggests a decrease of 24.7% from the prior-year reported number. American International beat the consensus estimate in three of the prior four quarters and missed once, the average being 13%. This is depicted in the graph below.
American International Group, Inc. Price and EPS Surprise
The Zacks Consensus Estimate for fourth-quarter revenues of $11,840 million indicates a 13.5% decrease from the year-ago reported figure, whereas our estimate suggests a 14.8% decline.
What the Quantitative Model Suggests
Our proven model conclusively predicts 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.
Earnings ESP: Earnings ESP for the company is +0.70%. The Most Accurate Estimate is pegged at $1.20 per share, higher than the Zacks Consensus Estimate of $1.19. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: American International currently has a Zacks Rank #2.
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 fourth quarter. The Zacks Consensus Estimate for net premiums written in General Insurance is pegged at $6,365 million, indicating a 6.8% increase from the year-ago period's reported figure, which is expected to have positioned the company for a beat this time around.
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 $882 million for the fourth quarter indicates a decline of 41.6% from the year-ago period, positioning the company for a year-over-year bottom-line fall.
The consensus mark for adjusted pre-tax income in Group Retirement, a part of Life and Retirement, is pegged at $223 million, signaling a 29% year-over-year decline, whereas our estimate indicates a 24.3% year-over-year fall.
The consensus mark for adjusted pre-tax income for the overall Life and Retirement business is pegged at $834 million, signaling a decrease of 13.9% from the prior-year quarter's reported figure.
Its transformative program, named AIG 200, is expected to have enabled the company to further curb costs and expenses in the fourth quarter. This is likely to have provided the bottom line some breathing room in the quarter under review.
Other Stocks That Warrant a Look
Here are some other companies from the broader finance space that you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat this time around:
The Zacks Consensus Estimate for AssetMark Financial’s bottom line for the to-be-reported quarter is pegged at 44 cents per share, implying a 33.3% improvement from the year-ago reported figure. AMK beat earnings estimates in three of the past four quarters and missed on the other occasion, with an average surprise of 6.1%.
Broadstone Net Lease, Inc. (BNL - Free Report) has an Earnings ESP of +3.54% and a Zacks Rank of 2 at present.
The Zacks Consensus Estimate for Broadstone Net Lease’s bottom line for the to-be-reported quarter is pegged at 38 cents per share, which suggests an 11.8% improvement from the year-ago reported figure. BNL witnessed one upward estimate revision against none in the opposite direction in the past 30 days.
Monroe Capital Corporation (MRCC - Free Report) currently has an Earnings ESP of +5.00% and a Zacks Rank of 2.
The Zacks Consensus Estimate for Monroe Capital’s bottom line for the to-be-reported quarter is pegged at 27 cents per share, indicating an 8% year-over-year rise. MRCC beat earnings estimates in one of the past four quarters and met on three other occasions, with an average surprise of 4%.
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Can American International's (AIG) Q4 Earnings Beat Estimates?
American International Group, Inc. (AIG - Free Report) is set to continue its earnings beat streak in the fourth quarter of 2022, the results of which are expected to be released on Feb 15, after the closing bell.
In the last reported quarter, the leading global insurance organization’s adjusted operating earnings of 66 cents per share beat the Zacks Consensus Estimate by 11.9% due to solid performance in General Insurance despite the negative impacts of Hurricane Ian, and increased Life and Retirement premiums. However, the positives were partially offset by reduced alternative investment income and higher expenses.
Now, let us see how things have shaped up prior to the fourth-quarter earnings announcement.
The Trend in Estimate Revision
The Zacks Consensus Estimate for fourth-quarter earnings per share of $1.19 has witnessed one upward estimate revision in the past 30 days against no movement in the opposite direction. The estimated figure, however, suggests a decrease of 24.7% from the prior-year reported number. American International beat the consensus estimate in three of the prior four quarters and missed once, the average being 13%. 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 fourth-quarter revenues of $11,840 million indicates a 13.5% decrease from the year-ago reported figure, whereas our estimate suggests a 14.8% decline.
What the Quantitative Model Suggests
Our proven model conclusively predicts 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.
Earnings ESP: Earnings ESP for the company is +0.70%. The Most Accurate Estimate is pegged at $1.20 per share, higher than the Zacks Consensus Estimate of $1.19. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: American International currently has a Zacks Rank #2.
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 fourth quarter. The Zacks Consensus Estimate for net premiums written in General Insurance is pegged at $6,365 million, indicating a 6.8% increase from the year-ago period's reported figure, which is expected to have positioned the company for a beat this time around.
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 $882 million for the fourth quarter indicates a decline of 41.6% from the year-ago period, positioning the company for a year-over-year bottom-line fall.
The consensus mark for adjusted pre-tax income in Group Retirement, a part of Life and Retirement, is pegged at $223 million, signaling a 29% year-over-year decline, whereas our estimate indicates a 24.3% year-over-year fall.
The consensus mark for adjusted pre-tax income for the overall Life and Retirement business is pegged at $834 million, signaling a decrease of 13.9% from the prior-year quarter's reported figure.
Its transformative program, named AIG 200, is expected to have enabled the company to further curb costs and expenses in the fourth quarter. This is likely to have provided the bottom line some breathing room in the quarter under review.
Other Stocks That Warrant a Look
Here are some other companies from the broader finance space that you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat this time around:
AssetMark Financial Holdings, Inc. (AMK - Free Report) currently has an Earnings ESP of +2.30% and is a Zacks #2 Ranked player. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for AssetMark Financial’s bottom line for the to-be-reported quarter is pegged at 44 cents per share, implying a 33.3% improvement from the year-ago reported figure. AMK beat earnings estimates in three of the past four quarters and missed on the other occasion, with an average surprise of 6.1%.
Broadstone Net Lease, Inc. (BNL - Free Report) has an Earnings ESP of +3.54% and a Zacks Rank of 2 at present.
The Zacks Consensus Estimate for Broadstone Net Lease’s bottom line for the to-be-reported quarter is pegged at 38 cents per share, which suggests an 11.8% improvement from the year-ago reported figure. BNL witnessed one upward estimate revision against none in the opposite direction in the past 30 days.
Monroe Capital Corporation (MRCC - Free Report) currently has an Earnings ESP of +5.00% and a Zacks Rank of 2.
The Zacks Consensus Estimate for Monroe Capital’s bottom line for the to-be-reported quarter is pegged at 27 cents per share, indicating an 8% year-over-year rise. MRCC beat earnings estimates in one of the past four quarters and met on three other occasions, with an average surprise of 4%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.