AIG reports 2Q profit, first since 2007

American International Group Inc. reported its first quarterly profit since 2007 on Friday, as the company saw stability in some of its businesses. AIG shares rose $1.97, or 8.7 percent, to $24.50 in pre-market trading. The troubled insurer made $1.82 billion during the second quarter ended June 30. Of that, $311 million, or $2.30 per share, was attributable to common shareholders because the U.S. government owns 80 percent of the company after bailing it out last year. For the year-ago second quarter, AIG lost $5.4 billion, or $41.13 per share. AIG now has received a government loan package worth up to $182.5 billion. The company has been aiming to spin off some of its assets to begin to repay the government money. It said in a filing with the Securities and Exchange Commission on Friday that it expects proceeds of about $8 billion from sales so far this year, giving it about $4.6 billion to begin repaying debts, including what it owes the government. The company said its profit was driven by the stabilizing value of some of its riskier investments, including in its AIG Financial Products Corp. portfolio, the much-maligned division responsible for many of the transactions that prompted the government bailout. AIG's near-collapse late last year was because of risky contracts such as credit default swaps, which act as insurance to protect an investor against default on an investment such as a mortgage-backed security. The financial-products division was able to increase the value of remaining swaps on its books by $636 million during the quarter, thanks to improving credit markets. In the second quarter of 2008, AIG cut the value of those holdings by $5.57 billion. Total revenue rose 48 percent, to $29.53 billion from $19.93 billion a year earlier. However, premiums fell during the quarter.