Let’s be honest: It’s pretty hard to be overly optimistic about AIG. It’s former CEO said it was worthless, and its new CEO can’t say he’s done much to change that fact. Indeed, while Brian Duperreault may claim to be the second coming of his mentor, Hank Greenberg, the fact is that the AIG still looks more like the Titanic of today than the Titanic the set sail from Southampton 106 years ago.
And yet, in spite of the above and the $6.7 billion loss in the fourth quarter, the analysts covering this sunken ship were hoodwinked by such dazzling phrases as “important step forward in positioning AIG for the future” and “starting paint from which we expect to build” and “modest net adverse development” got all misty-eyed and said that AIG wouldn’t see its net income drop by a fifth and its adjusted income by nearly a third even while everyone else who does what AIG does uh, didn’t do those things. And yet:
Adjusted after-tax income was $963 million, or $1.04 a share, for the quarter, compared with $1.4 billion, or $1.36 a share, in the prior-year quarter. The consensus estimate compiled by FactSet was $1.26 a share. Net income was $938 million, down from $1.19 billion….
At MetLife, net income was $1.25 billion, up 44% from the year-earlier period. Closely watched adjusted earnings were up 8% to $1.42 billion, and 13% on a per-share basis, to $1.36, handily beating analysts’ expectation of $1.17 a share.