Bailed-out insurance giant American International Group (AIG) fell far short of fourth-quarter 2015 earnings expectations Thursday, with adjusted net income of $1.3 billion missing Wall Street estimates by 24%, and earnings per share of $1.50 missing estimates by 76%, based on Bloomberg consensus data.
The New York company also booked an after-tax operating loss of $1.3 billion, nearly a complete reversal from an after-tax gain of $1.4 billion, year over year.
"At the beginning of 2015, we embarked on a three-year plan to transform AIG," CEO Peter Hancock said in a statement "Over the past year, we have been implementing our strategy and made significant progress towards our objectives."
The disappointing results could open the door to renewed activist pressure, after billionaire Carl Icahn's much publicized strategy to split apart the company into three more manageable parts seems to have been repudiated in favor of a management-led divestiture plan.
AIG's board, simultaneously to its earnings release, stated it will nominate John Paulson, president of Paulson & Company and notorious shorter of the 2008 subprime mortgage crisis, as well Samuel Merksamer, a managing director of Icahn Capital, as potential directors to be included in AIG's proxy statement for election.
"During the fourth quarter, we streamlined our management structure to accelerate decision-making and strengthen accountability," Hancock added. "Our recent strategy update detailed the next chapter of our transformation into a leaner, more profitable and focused insurer."
AIG also declared a 14% increase in the quarterly dividend to $0.32 per share, payable on March 28.
"We are pleased to increase both our share repurchase authorization by $5.0 billion, and our quarterly dividend to $0.32 per share from $0.28 per share," AIG Chairman Douglas Steenland said in a release. "These actions are part of our commitment to return $25 billion of capital to shareholders over the next two years. AIG's Board of Directors and management team are fully aligned on the current strategy to create value for all stakeholders."
The shares traded down nearly 4% in trading Thursday, and AIG is slated to host a call with analysts to further hash out the quarter and answer questions before the market opens Friday.
