AIG may have reported its first quarterly profit in nearly two years on Friday, but the company still has a long way to go before it can repay the billions of dollars it owes U.S. taxpayers.
The insurer said its second-quarter net income was $1.8 billion, or $2.30 per share, after six straight losing quarters. A year ago, it lost $5.4 billion, or $41.13 per share , CNNMoney.com reports.
Shares were up 11% at $25.01 in early trading Friday after the results handily beat expectations. The stock through Thursday was already up 71% this week amid optimism that the earnings report would exceed expectations.
Chairman and Chief Executive Edward Liddy said the results "reflect stabilization in certain of our businesses" and were driven by lower net realized capital losses , Wall Street Journal reports.
Exposure to derived products such as credit default swaps, last year AIG accumulated losses of almost 99 billion, a previously-unheard of figure which forced Washington to intervene with public money amounting to 180 billion dollars to prevent the company from going bankrupt, which would have had a devastating domino effect on the economy, and not just the US economy. The company is now 80% controlled by the State , AGI - Agenzia Giornalistica Italia reports.