After the Bell: AIG, First Solar Earnings on Tap
AIG looks fairly valued ahead of its earnings, while First Solar is still slightly undervalued.
Market Update
Bailed-out insurer American International Group (AIG) reports fourth-quarter earnings after the market close Thursday. Wall Street analysts expect the company to report a loss of $16.98 per share.
Recently, AIG said it would book a $4.1 billion charge in the quarterly results. Analysts will be keying in on management comments about the health of Chartis and SunAmerica in a sluggish economic recovery.
Analysts will also eye the performance of AIG's Asian insurance unit, AIA, which was listed in Hong Kong in October, and how proceeds of the share sale will be utilized.
At its current market price of $40 per share, the firm is fairly valued based on Morningstar's $40 fair value estimate.
First Solar (FSLR) is also expected to report quarterly earnings after the bell Thursday. Analysts, on average, expect the company to post earnings-per-share of $1.74, compared to $1.65 in the prior-year quarter.
Analysts will focus on the company's results in a few key areas, including whether rising demand for solar power in the United States has compensated for the fall in demand in Germany after the government cut incentives last year. Also of interest will be whether the fall in the company's average selling price, which was seen in the previous quarter, has been arrested, and if it has been able to lower its cost per watt from $0.77 in the previous quarter.
While the stock has run up about 40% in the past three months, Morningstar Analyst Stephen Simko thinks it is still slightly undervalued and feels First Solar's scale to manufacture solar power with photovoltaic semiconductors using cadmium telluride, as opposed to silicon that is used by most rivals, and its ability to keep manufacturing costs below the industry average will be beneficial in the long run.