AIG reported a quarterly loss of $2.66 billion today. That might sound bad, but its stock was up a few percent after the news. Why would that be? Because looking a little deeper at the numbers shows that AIG could make it in the long-run.

CNN/Money provides a broader picture:

AIG took a $3.3 billion charge for discontinued operations, including the sale of Alico, its second-largest foreign life insurance business.

Without charges, AIG said its adjusted net income was $1.34 billion, or $1.99 a share for the quarter, up from $1.14 billion, or $1.71 a share, a year earlier. Income from continuing operations more than doubled to $1.29 billion.

In other words, AIG's businesses that are continuing are making money. Its loss is due to where it went wrong in the past, the business lines that have been discontinued. The work it's still doing is proving to be quite profitable.

Whether the firm will ultimately make it, of course, remains a little unclear. These gigantic losses from its discontinued operations need to stop sooner than later. Even though AIG's actual work is making the firm money, a net profit is important, not only for market confidence in the firm, but also for employee retention.

Morale is pretty bad when a company is consistently losing money overall, even if a worker's individual unit is performing relatively well. Compensation will be depressed when net losses persist. So the question is: how long talented employees will endure big net losses? If AIG's best employees in its well-performing business units flee, then the firm's fate could be a grim one.

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