Despite American International Group’s recent profitable quarter, Moody’s Investors Service said its outlook remains negative and it has doubts about the company’s ability to fully repay the government.

Only partial repayment “is a real possibility,” said Moody’s analyst Bruce Ballentine.

The rating firm said it maintains the long-term issuer rating of A3 and short-term issuer rating of Prime-1 because of a negative outlook following AIG’s second-quarter report showing its first quarterly profit since that third quarter of 2007.

AIG’s two largest business segments, general insurance and life insurance & retirement services, have experienced significant declines in business volumes and operating income over the past year, Moody’s noted.

However, both segments showed signs of stabilization or slight improvement in this year’s second quarter compared with the first three months of the year, it noted.

The remaining company segments, financial services and asset management, showed “a clear improvement” by reporting only moderate second-quarter operating losses. “However, those units remain a potential drag on the group and may require additional capital/liquidity support and/or restructuring actions,” Moody’s said.

When the government agreed to support the failing conglomerate last year, it took a 79.9 percent interest in the firm. With the U.S. backing AIG, Moody’s said the company is preserving value in its major operating units.

The Moody’s analysis said AIG’s A3 senior unsecured debt rating reflects its expectation of the firm’s business and financial profile following its government-backed restructuring. The business profile will be driven largely by the market presence and performance of AIG’s core general insurance operations, which were recently re-branded as Chartis.

The Fed has provided $40 billion in senior secured loan money to AIG, and the Treasury has extended close to $42 billion in Trouble Asset Relief Program funds used to buy perpetual preferred shares and warrants from the company. It is not clear that there will be money there to repay the TARP outlay, Ballentine said.