American International Group, Inc. (AIG) is set to release its third-quarter earnings on November 1, 2023, after the closing bell. As we anticipate the results, let’s delve into the estimates and factors that might influence the company’s performance.

What Do the Estimates Say?

The Zacks Consensus Estimate for AIG’s third-quarter earnings per share is $1.55, representing a significant increase of 134.9% from the year-ago quarter’s reported earnings. Meanwhile, the expected revenues for the quarter are estimated to be $12.6 billion, indicating an 11.4% rise from the previous year.

American International Group, Inc. Price and EPS Surprise

What the Quantitative Model Suggests

Based on our proven model, which takes into account the positive Earnings ESP and Zacks Rank, there are high chances of AIG beating earnings estimates. The company has an Earnings ESP of +4.02% and currently holds a Zacks Rank #2.

Q2 Earnings Rewind

In the previous quarter, AIG reported adjusted operating earnings of $1.75 per share, surpassing the Zacks Consensus Estimate by 13.6%. The strong performance was attributed to improving net premiums earned, growing net investment income, and solid growth in the North America Commercial Lines segment. Although there were some setbacks in alternative investment income and higher expenses, AIG managed to deliver impressive results.

Factors Driving Q3 Performance

In the third quarter, AIG’s General Insurance business is expected to benefit from improved retention, new business, and continued growth in insurance premium rates. The net premiums earned in this segment are estimated to increase by nearly 4% compared to the previous year. Additionally, strong operations in North America are anticipated to contribute to increased profits, with adjusted pre-tax income projected to grow by more than 50% from the year-ago quarter.

AIG’s transformative program, AIG 200, is likely to have reduced costs and expense growth in the third quarter, providing a boost to the company’s bottom line. Furthermore, the favorable interest environment is expected to result in a 21.3% increase in net investment income. These factors position AIG for a year-over-year growth and a potential earnings beat.

Other Stocks That Warrant a Look

Here are some other finance industry companies that you may want to consider:

• Aflac Incorporated (AFL) with an Earnings ESP of +0.62% and a Zacks Rank #2.
• Trupanion, Inc. (TRUP) with an Earnings ESP of +1.27% and a Zacks Rank #1.
• KKR & Co. Inc. (KKR) with an Earnings ESP of +2.24% and a Zacks Rank #3.

For more information on these stocks and their earnings estimates, refer to the hyperlinks provided.

Stay updated on upcoming earnings announcements with the Zacks Earnings Calendar.

Conclusion

With the anticipation of impressive earnings results driven by strong growth in the General Insurance business, improved cost management, and favorable investment income, AIG is well-positioned to deliver a positive surprise for the third quarter. Investors should keep an eye on the company’s performance as it is expected to outperform.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.