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American Financial Group Inc. Reports Operating Results (10-Q)

November 08, 2010 | About:

American Financial Group Inc. (NYSE:AFG) filed Quarterly Report for the period ended 2010-09-30.

American Financial Group Inc. has a market cap of $3.44 billion; its shares were traded at around $31.69 with a P/E ratio of 8.06 and P/S ratio of 0.8. The dividend yield of American Financial Group Inc. stocks is 2.05%. American Financial Group Inc. had an annual average earning growth of 17.8% over the past 10 years.AFG is in the portfolios of John Buckingham of Al Frank Asset Management, Inc., Chuck Royce of Royce& Associates, Jeremy Grantham of GMO LLC, Steven Cohen of SAC Capital Advisors.

Highlight of Business Operations:

Net earnings attributable to AFGs shareholders for the third quarter of 2010 were $132 million ($1.21 per share, diluted) compared to $127 million ($1.09 per share, diluted) in the comparable 2009 period. Net earnings attributable to AFGs shareholders for the nine months ended September 30, 2010 were $346 million ($3.11 per share, diluted) compared to $358 million ($3.07 per share, diluted) in the comparable 2009 period. The 2010 results reflect improved operating results in the annuity and supplemental insurance group and higher realized gains offset by a decline in underwriting profit in the property and casualty operations.

In September 2010, AFG issued $132 million of 7% Senior Notes due 2050. In August 2010, AFG replaced its credit facility with a three-year, $500 million revolving credit line. No amounts were borrowed under this facility at September 30, 2010.

AFG retired the $136 million of 7-1/8% Senior Debentures at maturity in April 2009, using cash on hand. In June 2009, AFG issued $350 million of 9-7/8% Senior Notes due 2019.

National Interstate, a 52.5%-owned property and casualty insurance subsidiary, can borrow up to $75 million, subject to certain conditions, under an unsecured credit agreement expiring in December 2012. Amounts borrowed bear interest at rates ranging from .45% to .9% (currently .65%) over LIBOR based on National Interstates credit rating. There was $19 million outstanding under this agreement at September 30, 2010.

Investments AFGs investment portfolio at September 30, 2010, contained $19.5 billion in Fixed maturities classified as available for sale and $581 million in Equity securities, all carried at fair value with unrealized gains and losses included in a separate component of shareholders equity on an after-tax basis. In addition, $385 million in fixed maturities were classified as trading with changes in unrealized holding gains or losses included in investment income.

Summarized information for the unrealized gains and losses recorded in AFGs Balance Sheet at September 30, 2010, is shown in the following table (dollars in millions). Approximately $433 million of available for sale Fixed maturities and $51 million of Equity securities had no unrealized gains or losses at September 30, 2010.

Read the The complete Report

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GuruFocus has detected 6 Warning Signs with American Financial Group Inc $AFG.
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