American International Group Inc. (NYSE: AIG) said on Thursday that its first-quarter earnings rose sharply from a year ago, when results were hurt by hurricane losses.

Net income jumped 29 percent to $4.13 billion, or $1.58 a share, compared with the $3.20 billion, or $1.22 cents during the same period a year ago.

Adjusted net earnings, excluding hedging activities, were $4.39 billion, or $1.68 a share. On that basis, analysts expected $1.54 a share. In the year-ago quarter, AIG reported adjusted net profit $3.38 billion, or $1.29 cents a share.

AIG had a very good quarter, with strong performance in our worldwide General Insurance businesses, continued improvement in Foreign Life Insurance, and solid results at ILFC and Asset Management, AIG President and CEO Martin J. Sullivan said.

The firm's general insurance division reported strong growth in operating income on underwriting results and increased net investment income, it said. The unit saw operating income before realized capital gains increased 31.5 percent to $2.98 billion compared to the first quarter of 2006.

The company's Life Insurance and Retirement divisions also posted favorable growth, realizing a 5.1 percent income gain to $2.54 billion.

AIG Financial Products experienced slower transaction flow compared to a strong first quarter of 2006, however. Its operating income before capital gains was down 14.3 percent, seeing $444 million compared to last year. The company pointed to the slowdown in the real estate market, however said it could have been worse.

While the slowdown in the U.S. residential real estate market affected American General Finance's results, prior action taken to limit certain geographic and product exposures has helped AGF avoid some of the significant credit deterioration currently facing the real estate lending industry, Sullivan explained.

On Wednesday the world's largest insurer agreed to buy San Francisco-based MTC Holdings and its 32 seaport terminals. The deal includes facilities at the ports of Los Angeles and Long Beach, The Los Angeles Times reported.

AIG closed up 20 cents, or .28 percent to $72.20 before reporting its quarterly results.

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