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American International Group (AIG) Q1 Earnings: What's Up?
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American International Group, Inc. (AIG - Free Report) is scheduled to report first-quarter 2017 results on May 3, after market close.
Last quarter, AIG missed the Zacks Consensus Estimate by 32.3%. Let’s see how things are shaping up for this announcement.
Q1 Flashback
We expect performance from its Commercial Lines segment to remain stressed. Net premium written in the segment declined 25% in 2016. Given that the company has exited some of its casualty lines business, we expect the top line to remain under pressure over the coming quarters. The effect of the same will be seen in the to-be reported quarter.
During the quarter, the company announced that its chief executive officer, Peter D. Hancock intends to resign, but will remain at the helm until a successor is named. Also, during the quarter, the company struck a $50-million deal to sell one of its lesser-known assets: a northern Vermont ski slope.
The company’s Individual Retirement business is plagued by uncertainty stemming from the Department Of Labor’s fiduciary rule and lower fixed annuity sales due to the prevailing low interest rate environment. This resulted in lower sales last quarter and the same is expected in the to-be reported quarter. Though the company has undertaken remedial measures such as making changes to product pricing, product features and asset quality, we don’t expect much improvement to the top line in the upcoming release.
The company’s efforts toward saving costs will accrue to its bottom line. In 2016, the company was ahead of its expense reduction target and decreased the same by over $1 billion or 10%.
Operating improvements made by the company coupled with return of capital via aggressive share buybacks will continue to boost the bottom line.
American International Group, Inc. Price and EPS Surprise
Our proven model does not conclusively show that AIG is likely to beat on earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank of #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: AIG has an Earning ESP of 0.00%. This is because the Most Accurate estimate stands at $1.09 per share, which is in line with the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: AIG carries a Zacks Rank #3, which increases the predictive power of ESP. However, an Earnings ESP of 0.00% makes surprise prediction difficult.
We caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks That Warrant a Look
Here are some companies that you may consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Moody’s Corporation (MCO - Free Report) has an Earnings ESP of +7.38% and a Zacks Rank #2. The company is expected to report first-quarter earnings results on May 5.
The Priceline Group Inc. has an Earnings ESP of +2.05% and a Zacks Rank #3. The company is expected to report first-quarter earnings results on May 9.
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American International Group (AIG) Q1 Earnings: What's Up?
American International Group, Inc. (AIG - Free Report) is scheduled to report first-quarter 2017 results on May 3, after market close.
Last quarter, AIG missed the Zacks Consensus Estimate by 32.3%. Let’s see how things are shaping up for this announcement.
Q1 Flashback
We expect performance from its Commercial Lines segment to remain stressed. Net premium written in the segment declined 25% in 2016. Given that the company has exited some of its casualty lines business, we expect the top line to remain under pressure over the coming quarters. The effect of the same will be seen in the to-be reported quarter.
During the quarter, the company announced that its chief executive officer, Peter D. Hancock intends to resign, but will remain at the helm until a successor is named. Also, during the quarter, the company struck a $50-million deal to sell one of its lesser-known assets: a northern Vermont ski slope.
The company’s Individual Retirement business is plagued by uncertainty stemming from the Department Of Labor’s fiduciary rule and lower fixed annuity sales due to the prevailing low interest rate environment. This resulted in lower sales last quarter and the same is expected in the to-be reported quarter. Though the company has undertaken remedial measures such as making changes to product pricing, product features and asset quality, we don’t expect much improvement to the top line in the upcoming release.
The company’s efforts toward saving costs will accrue to its bottom line. In 2016, the company was ahead of its expense reduction target and decreased the same by over $1 billion or 10%.
Operating improvements made by the company coupled with return of capital via aggressive share buybacks will continue to boost the bottom line.
American International Group, Inc. Price and EPS Surprise
American International Group, Inc. Price and EPS Surprise | American International Group, Inc. Quote
Earnings Whispers
Our proven model does not conclusively show that AIG is likely to beat on earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank of #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: AIG has an Earning ESP of 0.00%. This is because the Most Accurate estimate stands at $1.09 per share, which is in line with the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: AIG carries a Zacks Rank #3, which increases the predictive power of ESP. However, an Earnings ESP of 0.00% makes surprise prediction difficult.
We caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks That Warrant a Look
Here are some companies that you may consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Prudential Financial Inc. (PRU - Free Report) will report first-quarter 2017 earnings results on May 3. The company has an Earnings ESP of +0.38% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Moody’s Corporation (MCO - Free Report) has an Earnings ESP of +7.38% and a Zacks Rank #2. The company is expected to report first-quarter earnings results on May 5.
The Priceline Group Inc. has an Earnings ESP of +2.05% and a Zacks Rank #3. The company is expected to report first-quarter earnings results on May 9.
5 Trades Could Profit "Big-League" from Trump Policies
If the stocks above spark your interest, wait until you look into companies primed to make substantial gains from Washington's changing course.
Today Zacks reveals 5 tickers that could benefit from new trends like streamlined drug approvals, tariffs, lower taxes, higher interest rates, and spending surges in defense and infrastructure. See these buy recommendations now >>