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Ameriprise (AMP) Q2 Earnings Beat Estimates, Costs Increase

Zacks Equity Research

Ameriprise Financial’s AMP second-quarter 2019 adjusted operating earnings per share of $4.06 surpassed the Zacks Consensus Estimate of $4.00. Further, the figure was 14% higher than the year-ago quarter level.

Results benefited from growth in assets under management (AUM) and assets under administration (AUA) along with higher revenues. However, rise in operating expenses was a headwind.

After taking into consideration several significant items, net income was $492 million or $3.57 per share, up from $462 million or $3.10 per share reported in the prior-year quarter.

Revenues Improve, Costs Rise

Net revenues (on a GAAP basis) were $3.25 billion, up 1.5% year over year. Moreover, the figure beat the Zacks Consensus Estimate of $2.95 billion. On an operating basis, total adjusted net revenues were also nearly $3.15 billion, up 3.2% year over year.

Adjusted operating expenses were $2.57 billion, up nearly 2.4% from the prior-year quarter.

AUM & AUA Improve

As of Jun 30, 2019, total AUM and AUA was $915.90 billion, up 2.8% year over year.

Capital Deployment

In the reported quarter, Ameriprise returned $570 million to shareholders in forms of share repurchases and dividends.

Our Take

While Ameriprise’s efforts to optimize its capital and risk position, and shift focus to core growth areas of Advice & Wealth Management are encouraging; continuously increasing expenses (as witnessed in the reported quarter) are likely to hurt profitability. Moreover, significant outflows in the Asset Management segment are expected to hamper financials.

Ameriprise Financial, Inc. Price, Consensus and EPS Surprise
 

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 #4 (Sell).

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 second-quarter 2019 adjusted earnings of $6.41 per share lagged the Zacks Consensus Estimate of $6.52. Moreover, the figure was 3.8% lower than the year-ago quarter’s number.

Blackstone BX reported second-quarter 2019 distributable earnings of 57 cents, beating the Zacks Consensus Estimate of 50 cents. Moreover, the figure reflects improvement from 56 cents earned in the prior-year quarter.

Cohen & Steers’ CNS second-quarter 2019 adjusted earnings of 62 cents per share lagged the Zacks Consensus Estimate of 63 cents. However, the bottom line was 5.1% higher than the year-ago quarter figure.

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