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Ameriprise (AMP) Q1 Earnings & Revenues Beat, AUM Rises

Zacks Equity Research

Ameriprise Financial’s AMP first-quarter 2019 adjusted operating earnings per share of $3.75 surpassed the Zacks Consensus Estimate of $3.61. Further, the figure came in 2% higher than the year-ago quarter level.

Results benefited from rise in assets under management (AUM) and assets under administration (AUA). However, lower revenues and rise in operating expenses were headwinds.

After taking into consideration several significant items, net income in the reported quarter was $395 million or $2.82 per share, down from $594 million or $3.91 per share posted in the prior-year quarter.

GAAP Revenues Down, Costs Up

Net revenues (on a GAAP basis) came in at $3.12 billion in the first quarter, down 1.6% year over year. However, the reported figure beat the Zacks Consensus Estimate of $3.04 billion. On an operating basis, total adjusted net revenues came in at $3.12 billion, up marginally.

Adjusted operating expenses were $2.48 billion, up nearly 1% from the prior-year quarter.

AUM & AUA Improves

As of Mar 31, 2019, total AUM and AUA was $891.18 billion, marginally up year over year. This upside reflected strength in Ameriprise’s advisor client net inflows, partly muted by asset management outflows.

Capital Deployment

Concurrently, Ameriprise announced quarterly dividend of 97 cents per share, marking an increase of 8% from the prior payout. This dividend will be paid on May 17, to shareholders on record as of May 6, 2019.

In the reported quarter, Ameriprise repurchased 2.8 million shares for $355 million. Further, in February, the company announced an additional share-repurchase program of up to $2.5 billion, expiring on Mar 31, 2021.

Conclusion

Ameriprise’s efforts to optimize its capital and risk position, and shifting the company’s focus to core growth areas of Advice & Wealth Management are encouraging. The company’s plan to offer a range of banking and credit products through opening a federal savings bank has been approved by regulators, which will likely be unveiled in the current quarter.

Additionally, Ameriprise has been restructuring and streamlining its operations. The company announced an agreement to sell its Auto & Home Insurance business for roughly $950 million.

Further, the company’s insurance subsidiary, RiverSource Life Insurance Company, entered into an agreement with Commonwealth Annuity and Life Insurance Company to reinsure nearly $1.7 billion of fixed annuity policies through third parties.

All these efforts are expected to support Ameriprise’s profitability in the days ahead. However, despite the company’s initiatives to strengthen expense management, advertising campaign and technology upgrades will likely keep expenses elevated in the near term.

Ameriprise Financial, Inc. Price, Consensus and EPS Surprise

Ameriprise Financial, Inc. Price, Consensus and EPS Surprise | 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 first-quarter 2019 adjusted earnings of $6.61 per share surpassed the Zacks Consensus Estimate of $6.20. However, the figure came in 1.3% lower than the year-ago quarter’s number.

Blackstone’s BX first-quarter distributable earnings of 44 cents lagged the Zacks Consensus Estimate of 52 cents. However, the figure reflected improvement from the 41 cents earned in the prior-year quarter.

Cohen & Steers’ CNS first-quarter 2019 adjusted earnings came in at 58 cents per share, missing the Zacks Consensus Estimate by a penny. Also, the bottom line came in 6.5% lower than the year-ago quarter figure.

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