CHARLOTTE, N.C._Shares of American International Group Inc. extended their gains Monday, after the insurer said it was profitable in the second quarter.

Shares rose $2.14, or 7.9 percent, to $29.28 in afternoon trading.

AIG said Friday it earned $1.82 billion in the April-June quarter as some of its soured assets regained value. But its core insurance business deteriorated sharply amid the recession. And AIG cautioned that unwinding its $1.3 trillion worth of derivatives will take a long time, and that future results will be volatile as it accounts for its restructuring.

However, investors appeared to focusing on AIG's profit, which included $311 million, or $2.30 per share, for common shareholders.

"While still far from healthy, we were very pleased to see that much of the company's hemorrhaging has begun to subside," wrote CreditSights analyst Rob Haines in a note to clients.

When the credit crisis hit last year, the U.S. government rescued AIG from the brink of collapse with a loan bailout package worth up to $182.5 billion. The government now owns roughly 80 percent of the huge insurer. AIG is now shedding assets and cutting costs as it restructures.

The company's new chief executive, former MetLife Inc. Chairman and CEO Robert Benmosche, also took over Monday. Benmosche, 65, replaces CEO Edward Liddy, former CEO of Allstate Corp., who took over last fall after the government bailed out the New York-based insurer.

Haines said Benmosche at the helm is a "positive development," as he is highly regarded within the industry.

"While AIG's relationship with Congress is likely to remain contentious, we believe that Benmosche could help to diffuse some of the antagonism," Haines wrote.