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What's in the Cards for American International's (AIG) Q2 Earnings?
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American International Group, Inc. (AIG - Free Report) is scheduled to release second-quarter 2023 results on Aug 1, after the market close.
Q2 Estimates
The Zacks Consensus Estimate for American International’s second-quarter earnings per share is pegged at $1.54, which indicates an improvement of 29.4% from the prior-year quarter’s reported figure.
The consensus mark for revenues stands at $12,284 million, suggesting 12.7% growth from the year-ago quarter’s reported number.
Earnings Surprise History
American International’s bottom line beat estimates in three of the trailing four quarters and missed the mark once, the average surprise being 9.22%. This is depicted in the chart below:
American International Group, Inc. Price and EPS Surprise
In the second quarter, revenues of AIG are likely to have benefited on the back of strong contributions from higher premium income and net investment income. While premiums are likely to have received a boost on the back of solid commercial and personal lines businesses, net investment income is expected to have gained from improved returns from fixed maturities and loans.
We expect premium income of American International to be $7,869.1 million, which implies a 4.8% rise year over year. Our estimate for net investment income stands at $2,627.8 million, suggesting 0.9% growth year over year.
Strong contributions from the General Insurance and, Life and Retirement segments are expected to have driven top-line growth in the to-be-reported quarter. The General Insurance unit is likely to have been aided by strength in commercial business resulting from rate increases, higher retention rates and new business growth. We anticipate net premiums written of the General Insurance segment to be $7,286.6 million, suggesting 6.1% growth year over year.
Growing earned premiums and an improved combined ratio are expected to have boosted the underwriting results of the unit in the second quarter. Our estimate for its underwriting income indicates a surge of 38.9% year over year. Meanwhile, we project the General Insurance’s adjusted pretax income to be $1,561.8 million, implying 24.3% growth year over year.
The Life and Retirement business of AIG is likely to have received an impetus from growing premiums and deposits in the to-be-reported quarter, which in turn, are expected to have stemmed from increased fixed annuity and fixed index annuity product sales. Our estimate for adjusted revenues in the segment is pegged at $4,566.5 million, suggesting 13.1% rise from the prior-year quarter’s reported figure.
However, reduced alternative investment income and lower fee income are expected to have been a roadblock for the Life and Retirement unit in the second quarter. We expect adjusted pretax income of the segment to be $626.2 million, which indicates a decline of 16.2% year over year.
Despite numerous cost-cutting initiatives and favorable mortality experience, the bottom line of American International is likely to have suffered a blow due to an elevated expense base related to policyholder benefits and losses incurred plus general operating and other expenses in the to-be-reported quarter. Our estimate for total benefits and expenses stands at $11,220.5 million, implying a 15.2% increase year over year.
What Our Quantitative Model Predicts
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 odds of an earnings beat. However, that’s not the case here, as you see below.
Earnings ESP: American International has an Earnings ESP of -0.56% because the Most Accurate Estimate of $1.53 is pegged lower than the Zacks Consensus Estimate of $1.54. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: AIG currently carries a Zacks Rank of 3.
Stocks to Consider
While an earnings beat looks uncertain for American International, here are some companies from the insurance space, which according to our model, have the right combination of elements to beat on earnings this time around:
The Zacks Consensus Estimate for AEL’s second-quarter 2023 earnings is pegged at $1.57 per share, indicating a surge of 60.2% from the prior-year quarter’s reported figure.
American Equity’s bottom line beat estimates in three of the trailing four quarters and missed the mark once, the average surprise being 13.01%.
Aflac Incorporated (AFL - Free Report) has an Earnings ESP of +1.41% and a Zacks Rank of 3, currently. The Zacks Consensus Estimate for AFL’s second-quarter 2023 earnings is pegged at $1.42 per share. The consensus mark for AFL’s second-quarter earnings has moved 0.7% north in the past 60 days.
Aflac’s earnings beat estimates in each of the trailing four quarters, the average surprise being 8.23%.
Brighthouse Financial, Inc. (BHF - Free Report) has an Earnings ESP of +0.42% and a Zacks Rank of 3, currently. The Zacks Consensus Estimate for BHF’s second-quarter 2023 earnings is pegged at $3.55 per share, suggesting 7.9% growth from the prior-year quarter’s reported figure.
Brighthouse Financial has witnessed three upward estimate revisions for second-quarter earnings compared to two downward estimate revisions in the past 30 days.
Image: Bigstock
What's in the Cards for American International's (AIG) Q2 Earnings?
American International Group, Inc. (AIG - Free Report) is scheduled to release second-quarter 2023 results on Aug 1, after the market close.
Q2 Estimates
The Zacks Consensus Estimate for American International’s second-quarter earnings per share is pegged at $1.54, which indicates an improvement of 29.4% from the prior-year quarter’s reported figure.
The consensus mark for revenues stands at $12,284 million, suggesting 12.7% growth from the year-ago quarter’s reported number.
Earnings Surprise History
American International’s bottom line beat estimates in three of the trailing four quarters and missed the mark once, the average surprise being 9.22%. This is depicted in the chart below:
American International Group, Inc. Price and EPS Surprise
American International Group, Inc. price-eps-surprise | American International Group, Inc. Quote
Factors to Note
In the second quarter, revenues of AIG are likely to have benefited on the back of strong contributions from higher premium income and net investment income. While premiums are likely to have received a boost on the back of solid commercial and personal lines businesses, net investment income is expected to have gained from improved returns from fixed maturities and loans.
We expect premium income of American International to be $7,869.1 million, which implies a 4.8% rise year over year. Our estimate for net investment income stands at $2,627.8 million, suggesting 0.9% growth year over year.
Strong contributions from the General Insurance and, Life and Retirement segments are expected to have driven top-line growth in the to-be-reported quarter. The General Insurance unit is likely to have been aided by strength in commercial business resulting from rate increases, higher retention rates and new business growth. We anticipate net premiums written of the General Insurance segment to be $7,286.6 million, suggesting 6.1% growth year over year.
Growing earned premiums and an improved combined ratio are expected to have boosted the underwriting results of the unit in the second quarter. Our estimate for its underwriting income indicates a surge of 38.9% year over year. Meanwhile, we project the General Insurance’s adjusted pretax income to be $1,561.8 million, implying 24.3% growth year over year.
The Life and Retirement business of AIG is likely to have received an impetus from growing premiums and deposits in the to-be-reported quarter, which in turn, are expected to have stemmed from increased fixed annuity and fixed index annuity product sales. Our estimate for adjusted revenues in the segment is pegged at $4,566.5 million, suggesting 13.1% rise from the prior-year quarter’s reported figure.
However, reduced alternative investment income and lower fee income are expected to have been a roadblock for the Life and Retirement unit in the second quarter. We expect adjusted pretax income of the segment to be $626.2 million, which indicates a decline of 16.2% year over year.
Despite numerous cost-cutting initiatives and favorable mortality experience, the bottom line of American International is likely to have suffered a blow due to an elevated expense base related to policyholder benefits and losses incurred plus general operating and other expenses in the to-be-reported quarter. Our estimate for total benefits and expenses stands at $11,220.5 million, implying a 15.2% increase year over year.
What Our Quantitative Model Predicts
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 odds of an earnings beat. However, that’s not the case here, as you see below.
Earnings ESP: American International has an Earnings ESP of -0.56% because the Most Accurate Estimate of $1.53 is pegged lower than the Zacks Consensus Estimate of $1.54. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: AIG currently carries a Zacks Rank of 3.
Stocks to Consider
While an earnings beat looks uncertain for American International, here are some companies from the insurance space, which according to our model, have the right combination of elements to beat on earnings this time around:
American Equity Investment Life Holding Company (AEL - Free Report) has an Earnings ESP of +7.85% and a Zacks Rank of 2, currently. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for AEL’s second-quarter 2023 earnings is pegged at $1.57 per share, indicating a surge of 60.2% from the prior-year quarter’s reported figure.
American Equity’s bottom line beat estimates in three of the trailing four quarters and missed the mark once, the average surprise being 13.01%.
Aflac Incorporated (AFL - Free Report) has an Earnings ESP of +1.41% and a Zacks Rank of 3, currently. The Zacks Consensus Estimate for AFL’s second-quarter 2023 earnings is pegged at $1.42 per share. The consensus mark for AFL’s second-quarter earnings has moved 0.7% north in the past 60 days.
Aflac’s earnings beat estimates in each of the trailing four quarters, the average surprise being 8.23%.
Brighthouse Financial, Inc. (BHF - Free Report) has an Earnings ESP of +0.42% and a Zacks Rank of 3, currently. The Zacks Consensus Estimate for BHF’s second-quarter 2023 earnings is pegged at $3.55 per share, suggesting 7.9% growth from the prior-year quarter’s reported figure.
Brighthouse Financial has witnessed three upward estimate revisions for second-quarter earnings compared to two downward estimate revisions in the past 30 days.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.