Two Big Losers: American International Group & Cognizant Technology Solutions (AIG, CTSH)
American International Group, Inc. (NYSE:AIG) fell 3.50% on very high trading volume as the insurer said that the U.S. Treasury priced an offering of 163.9 million shares of the company at $30.50.
The $5 billion sale will reduce the Government’s investment in the Company done in a bailout circumstance, to $39 billion. The Government has already sold a chunk of the insurer’s shares at prices lower than the current offering price.
AIG, the New York insurer, has rebounded around 36.55% year to date with the Company also reporting a better than expected first quarter 2012 earnings. The Company had reported first quarter earnings per share of $1.65, beating the Zacks Consensus Estimate of $1.04. Also, in a recently issued estimates consensus revision chart by Bloomberg, the Company’s calendar second quarter eps estimate has been raised to $0.68 from $0.66 (an upward estimate revision of 3%).
AIG has agreed to buy 65.6 million shares from within the offering for around $2 billion. A separate option for 24.6 million of additional shares has also been granted by the Treasury to the underwriters.
American International Group, Inc. (NYSE:AIG) was down around 3% with the shares exchanging hands at a very high volume of 106.62 million shares as against its average trading volume of 14.20 million shares.
Cognizant Technology Solutions Corp (NASDAQ:CTSH) shares slumped 16.50% after the company lowered its full year guidance. The company lowered its adjusted earnings outlook for 2012 to $3.62 per share on revenue of at least $7.34 billion — down from its previous forecast of $3.69 per share in adjusted earnings on revenue of $7.53 billion.
Cognizant said it expects its banking and pharmaceutical sectors to remain sluggish for the rest of the year.
In January, market research firm Gartner cut its forecast for worldwide IT spending growth this year to 3.7% from the 4.6% it estimated earlier.
Cognizant recorded 11% growth from Europe for the first quarter, better than its earlier forecast. But the company is still not bullish on the region.