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Ameriprise (AMP) Q2 Earnings Beat, Revenues & Costs Rise Y/Y

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Ameriprise Financial’s AMP second-quarter 2021 adjusted operating earnings per share of $5.27 surpassed the Zacks Consensus Estimate of $5.23. The bottom line reflects a rise of 39.4% from the year-ago quarter. Notably, the prior-year quarter figure excludes net operating loss tax impacts.

Results were aided by growth in revenues, partly offset by higher expenses. Improvements in assets under management (AUM) and assets under administration (AUA) balance were tailwinds.

After taking into consideration significant items, net income (GAAP basis) was $591 million or $4.88 per share against a net loss of $539 million or $4.31 per share in the prior-year quarter.

Revenues Improve, Expenses Rise

On an operating basis, total adjusted net revenues were $3.39 billion, up 22.5% year over year. The top line surpassed the Zacks Consensus Estimate of $3.38 billion. On a GAAP basis, net revenues were $3.42 billion, up 26% year over year.

Adjusted operating expenses totaled $2.61 billion, up 19.1% from the prior-year quarter.

AUM & AUA Improve

Driven by strong client flows in the Wealth and Asset Management segments and market appreciation, total AUM and AUA were $1.21 trillion, up 27.9% year over year.

Share Repurchase Update

In the reported quarter, Ameriprise repurchased shares worth $450 million.

Conclusion

In April 2021, the company announced an agreement with Canada-based BMO Financial Group to take over its EMEA asset management operations for $845 million in cash to further strengthen its wealth and asset management businesses. The deal, expected to close in the fourth quarter of 2021, will likely be earnings accretive in 2023.

In June, Ameriprise announced that its insurance subsidiaries entered an agreement to reinsure approximately $8 billion of fixed annuities, which will free up $700 million of capital.

Ameriprise’s solid AUM balance, diversified investment portfolio and business-restructuring efforts are expected to keep aiding profitability. However, rising expenses make us apprehensive.

Ameriprise Financial, Inc. Price, Consensus and EPS Surprise

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 #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 second-quarter 2021 adjusted earnings of $10.03 per share outpaced the Zacks Consensus Estimate of $9.24. The figure reflects a rise of 27.8 % from the year-ago quarter’s number.

Blackstone’s BX second-quarter 2021 distributable earnings of 82 cents per share surpassed the Zacks Consensus Estimate of 80 cents. The figure reflects a rise of 90.7% from the prior-year quarter.

SEI Investments Co.’s SEIC second-quarter 2021 earnings of 93 cents per share beat the Zacks Consensus Estimate by a penny. The bottom line reflected 37% growth from the prior-year quarter.


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