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Is an Earnings Beat in Store for Ameriprise (AMP) in Q1?

Zacks Equity Research

Ameriprise Financial, Inc. AMP is scheduled to report first-quarter 2020 results on May 6, after market close. While its earnings are anticipated to have increased in the quarter on a year-over-year basis, revenues are expected to have witnessed a decline.

In the last reported quarter, the company’s earnings lagged the Zacks Consensus Estimate. It recorded higher revenues along with growth in assets under management (AUM) and assets under administration (AUA).

Ameriprise has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters, the average beat being 2.8%.

Ameriprise Financial, Inc. Price and EPS Surprise
 

Ameriprise Financial, Inc. Price and EPS Surprise

Ameriprise Financial, Inc. price-eps-surprise | Ameriprise Financial, Inc. Quote

However, the Zacks Consensus Estimate for its earnings of $3.88 for the to-be-reported quarter has been unchanged over the past seven days. Nevertheless, the figure indicates 3.5% growth from the prior-year quarter’s reported number.

The consensus estimate for sales is pegged at $2.87 billion, which suggests an 8.1% decline from the year-ago quarter’s reported figure.

Before we take a look at what our quantitative model predicts, let’s check the factors that are likely to have influenced the company’s performance in the first quarter.

Estimates & Key Factors to Note

The Zacks Consensus Estimate for management and financial advice fees (constituting more than 55% of the company’s total net revenues) is pegged at $1.86 billion, which suggests a marginal decline from the prior quarter’s reported number.

The consensus estimate for distribution fees of $482 million indicates a rise of 2.8% sequentially. Also, the consensus estimate for net investment income of $348 million suggests 1.8% growth from the previous quarter.

The consensus estimate for other revenues is pegged at $319 million, indicating a decline of 5.6% sequentially.

Notably, the company’s Asset Management segment has been recording net outflows over the past several quarters, which has been negatively impacting asset growth. However, the Advice & Wealth Management segment is likely to have recorded growth in assets in the first quarter, based on expectations of improved advisor productivity.

While Ameriprise’s initiatives to focus on cost management have resulted in controlled general and administrative expenses, overall costs are likely to have remained elevated in the first quarter due to costs related to advertising campaign and technology upgrades.

Earnings Whispers

According to our quantitative model, chances of Ameriprise beating the Zacks Consensus Estimate this time are high. This is because it has the right combination of the two key ingredients — a positive Earnings ESP and Zacks Rank #3 (Hold) or better, which is required to be confident of an earnings beat.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: Ameriprise has an Earnings ESP of +9.63%.

Zacks Rank: The company currently carries a Zacks Rank #3.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Among other finance stocks, Fidelity National Information Services, Inc. FIS and Main Street Capital Corporation MAIN are slated to release quarterly results on May 7, while Essent Group Ltd. ESNT will report the same on May 8.

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