Global multi-line insurer -
American International Group Inc.
) is scheduled to release its first-quarter 2014 financial
results after the closing bell on May 5.
In the last reported fourth-quarter 2013, the company had
delivered a positive earnings surprise of 19.8%, while the
four-quarter trailing average beat is pegged at 26.8%. Let's see
how things are shaping up for this announcement.
Factors that Seek Attention
Being a global insurer, AIG faces intense competition and
regulatory challenges, while volatility in interest rates and
currency pose additional financial and operating risks. These
factors are also affecting the top line adversely given
consistently lower premiums, lower investment income and
unfavorable reserves in the property-casualty (P&C) unit,
which also led to underwriting losses in the past couple of
However, the successful streamlining and de-risking of
business as well as the capital flexibility attained with the
divestment of ILFC score well with the ratings agencies. Improved
assets under management (AUM) and financial leverage also remain
Nonetheless, any expectation of generating robust growth
appears overly ambitious at present, given the absence of any
near-term fundamental growth catalyst, overall casting shadow on
the outlook of AIG in the upcoming quarters.
Our proven model shows that AIG is unlikely to beat earnings
as it lacks the required combination of two key ingredients.
: AIG has a negative Zacks ESP. That is because Expected Surprise
, which represents the difference between the Most Accurate
estimate of $1.06 per share and the Zacks Consensus Estimate of
$1.08, is -1.85%.
: AIG has a Zacks Rank #3 (Hold). Note that stocks with Zacks
Rank #1, 2 and 3 have significantly higher chances of beating
earnings. Sell-rated stocks (#4 and 5) are kept under the radar
and are never considered going into the earnings
The combination of AIG's Zacks Rank #3 and -1.85% ESP deter us
from being confident of an earnings beat on May 5.
Other Stocks to Consider
Here are some other companies you may want to consider as our
model shows they have the right combination of elements to post
an earnings beat this coming quarter:
CBOE Holdings Inc.
), earnings ESP of +3.70% and a Zacks Rank #3 (Hold).
), earnings ESP of +1.55% and a Zacks Rank #3.
), earnings ESP of +0.88% and a Zacks Rank #3.
AMER INTL GRP (AIG): Free Stock Analysis
ALLSTATE CORP (ALL): Free Stock Analysis
CBOE HOLDINGS (CBOE): Free Stock Analysis
HUMANA INC NEW (HUM): Free Stock Analysis
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