Ameriprise (AMP) Dips Despite Q4 Earnings Beat, Costs Rise Y/Y
Ameriprise Financial’s AMP fourth-quarter 2023 adjusted operating earnings (excluding regulatory accrual, severance and mark-to-market impacts on share-based compensation expenses) of $7.75 per share handily surpassed the Zacks Consensus Estimate of $7.67. The bottom line reflects a rise of 14% from the year-ago quarter.
Results were aided by revenue growth, along with higher assets under management (AUM) and assets under administration (AUA) balances. However, an increase in expenses was a negative. Probably due to this, shares of the company lost 5% in the after-market trading following the earnings release.
After considering significant items, net income (GAAP basis) was $377 million or $3.57 per share, down from $649 million or $5.83 per share in the prior-year quarter. Our estimate for the metric was $675.2 million.
For 2023, adjusted operating earnings (excluding unlocking and regulatory accrual, severance, and mark-to-market impacts on share-based compensation expenses) of $30.46 per share handily surpassed the Zacks Consensus Estimate of $29.36. The bottom line reflects a rise of 24% from the previous year. Net income (GAAP basis) was $2.56 billion, down from $3.15 billion in the previous year. Our estimate for the metric was $2.85 billion.
Revenues Improve, Expenses Rise
Total net revenues for the quarter were $3.99 billion, up 9% year over year. The top line beat the Zacks Consensus Estimate of $3.87 billion.
Adjusted operating total net revenues were $3.95 billion, growing 8% year over year.
Adjusted operating expenses (excluding regulatory accrual, severance and mark-to-market impacts on share-based compensation expenses) totaled $2.91 billion, which increased 8% year over year. We had projected adjusted expenses of $2.83 billion.
Total AUM and AUA increased 15% year over year to $1.36 trillion. The rise reflected strong client net inflows and market appreciation. Our estimate for the metric was $1.22 trillion.
Share Repurchase Update
In the reported quarter, Ameriprise repurchased 1.2 million shares for $445 million.
Our Take
Elevated expenses (mainly due to technology upgrades) will likely continue to hurt AMP’s bottom line. However, Ameriprise is well-positioned for impressive top-line growth on the back of its robust AUM balance and business-restructuring initiatives.
Ameriprise Financial, Inc. Price, Consensus and EPS Surprise
Ameriprise Financial, Inc. price-consensus-eps-surprise-chart | Ameriprise Financial, Inc. Quote
Ameriprise currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Asset Managers
BlackRock, Inc.’s BLK fourth-quarter 2023 adjusted earnings of $9.66 per share handily surpassed the Zacks Consensus Estimate of $8.84. The figure reflects an increase of 8.2% from the year-ago quarter.
BLK’s quarterly results benefited from a rise in revenues and higher non-operating income. Further, its AUM balance witnessed an improvement due to net inflows. However, higher expenses acted as a dampener.
Invesco’s IVZ fourth-quarter 2023 adjusted earnings of 47 cents per share handily surpassed the Zacks Consensus Estimate of 38 cents. The bottom line grew 20.5% from the prior-year quarter.
IVZ’s results benefited from an increase in the AUM balance on decent inflows. However, a rise in operating expenses and lower revenues were the undermining factors.
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