INSTANT VIEW: AIG posts third straight loss
NEW YORK (Reuters) - American International Group Inc, the world's largest insurer, posted its third consecutive quarterly net loss, hurt again by the write down of derivatives linked to bad mortgage investments.
AIG said on Wednesday its second-quarter net loss was $5.36 billion, or $2.06. a share, compared with net income of $4.28 billion, or $1.64 a share in the year-earlier quarter.
Market reaction: Shares fall 7.2 percent to $27 in extended trade.
The following is reaction from industry analysts and investors:
WILLIAM SMITH, CEO, SMITH ASSET MANAGEMENT, NEW YORK:
"Considering the headline numbers the stock reaction is reasonable. All these financial companies that were trafficking in the toxic waste, have to find a way to replace these revenues.
"If you are an investment bank, there are a lot more avenues to take, whereas with insurance companies it will be more difficult."
BILL FITZPATRICK, EQUITY RESEARCH ANALYST, OPTIQUE CAPITAL
MANAGEMENT IN MILWAUKEE, WISCONSIN:
"The losses are a little higher than we would have hoped for. But the thesis remain the same that these portfolios will ultimately be marked up."
KEITH WIRTZ, PRESIDENT AND CHIEF INVESTMENT OFFICER OF
FIFTH THIRD ASSET MANAGEMENT, WHICH MANAGES $22 BILLION
"They may have taken a write down in the same vein as Merrill Lynch did. It looks like the new CEO took what I call a kitchen sink quarter."
(Reporting by Jennifer Ablan, Dan Wilchins and Paritosh Bansal)
