Investing.com -- Shares in AIG were relatively flat in after-hour trading, after the multinational insurance corporation posted mixed second quarter earnings and authorized an additional $5 billion in stock buybacks on Monday.
For AIG's second quarter of 2015 which ended in late-June, the company reported net income of $1.9 billion, compared with net income of $3.07 billion during the same quarter in 2014. AIG blamed the lower profits on the extinguishment of debt from ongoing liability management activities, lower capital gains from sales of investments and a net gain on the sale of divested business related to the sell-off of its aircraft-leasing business.
In addition, AIG announced that its Board of Director authorized additional allocations for buybacks, boosting its total repurchase authorization to approximately $6.3 billion. AIG officials also said Monday that its quarterly dividend will increase to 0.28 from a previous level of 12.5 cents. The increased dividend will provide approximately $200 million to shareholders each quarter based on the 1.31 billion shares that were outstanding at the end of June.
“Our second quarter results demonstrate our steadfast commitment to value-based management – we’re taking action today to create long-term value for tomorrow,” AIG CEO Peter Hancock said in a statement. “We continued to proactively manage our capital resources through both common stock and debt repurchases. We significantly reduced our non-core investments in both AerCap and Springleaf."
"These actions simplify our balance sheet and improve our risk profile. Our Board’s approval of an additional $5.0 billion share repurchase authorization, and a 124 percent increase in the quarterly dividend to $0.28 per share, highlights our commitment to shareholder return and our positive outlook for long-term profitability.”
Despite the reductions in quarterly profits, AIG still increased its quarterly per-share operating profit by 13% from 1.23 to 1.39 per diluted share during the period. AIG also beat analysts' forecasts for per share earnings of 1.22 by a wide margin over the second quarter.
“Our focus on value and long-term sustainability benefits our clients and our shareholders. We’ll continue to balance growth, profitability and risk as we work to become our clients’ most valued insurer," Hancock added.
In December, 2012, the U.S. Department of Treasury said in a report that in conjunction with the Federal Reserve of New York it provided a total of $182.3 billion to the insurance giant to help aid its rescue during the Financial Crisis. Subsequently, AIG said it paid back a total of $205 billion to the Federal Government, resulting in a return of $22.7 billion.
Shares in AIG inched up 0.09 or 0.15% to 64.24 in after-hours trading.