American International Group
The 10-second takeaway
For the quarter ended June 30 (Q2), American International Group missed estimates on revenues and crushed expectations on earnings per share.
Compared to the prior-year quarter, revenue shrank. Non-GAAP earnings per share grew. GAAP earnings per share expanded significantly.
Gross margins dropped, operating margins dropped, net margins grew.
American International Group chalked up revenue of $8.35 billion. The eight analysts polled by S&P Capital IQ anticipated sales of $8.62 billion on the same basis. GAAP reported sales were 18% lower than the prior-year quarter's $17.13 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures are normalized by S&P Capital IQ and may vary to maintain comparability with normalized estimates.
EPS came in at $1.12. The 20 earnings estimates compiled by S&P Capital IQ forecast $0.86 per share. Non-GAAP EPS of $1.12 for Q2 were 5.7% higher than the prior-year quarter's $1.06 per share. GAAP EPS of $1.84 for Q2 were 38% higher than the prior-year quarter's $1.33 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures are normalized by S&P Capital IQ and may vary to maintain comparability with normalized estimates.
For the quarter, gross margin was 17.0%, 590 basis points worse than the prior-year quarter. Operating margin was 10.4%, 550 basis points worse than the prior-year quarter. Net margin was 19.4%, 580 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $8.68 billion. On the bottom line, the average EPS estimate is $0.82.
Next year's average estimate for revenue is $34.56 billion. The average EPS estimate is $3.93.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 2,869 members out of 3,445 rating the stock outperform, and 576 members rating it underperform. Among 749 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 660 give American International Group a green thumbs-up, and 89 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on American International Group is outperform, with an average price target of $48.09.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month. The Motley Fool recommends American International Group. The Motley Fool owns shares of American International Group and has the following options: long January 2014 $25 calls on American International Group. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.