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Why is a Beat Less Likely for Ameriprise (AMP) in Q3 Earnings?

Zacks Equity Research

Ameriprise Financial, Inc. AMP is scheduled to report third-quarter 2019 results on Oct 23, after the market closes. While its earnings are expected to have grown in the quarter on a year-over-year basis, revenues are likely to have witnessed a decline.

In the last reported quarter, the company’s earnings surpassed the Zacks Consensus Estimate. Results benefited from growth in assets under management (AUM) and assets under administration (AUA) along with higher revenues. However, rise in expenses was a headwind.

Ameriprise has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in all of the trailing four quarters, the average beat being 3.1%.

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, activities of the company in the third quarter did not encourage analysts to revise earnings estimates upward. Thus, the Zacks Consensus Estimate for earnings of $3.97 for the to-be-reported quarter has remained unchanged over the past seven days. Nevertheless, the figure indicates 6.2% growth from the prior-year quarter’s reported number.

The consensus estimate for the company’s sales is pegged at $2.96 billion, which suggests nearly 10.1% decline from the year-ago quarter’s reported figure.

Before we take a look at what our quantitative model predicts for the third quarter, let’s check the factors that are likely to have influenced results.

Factors to Influence Q3 Results

Ameriprise has been witnessing net outflows in the Asset Management segment over the past several quarters, which have negatively impacted AUM and AUA to some extent. However, the Advice & Wealth Management segment is likely to have recorded growth in assets in the third quarter, based on expectations of improved advisor productivity. Thus, total assets are likely to have risen in the quarter.

Supported by expected increase in assets, the related fee is also likely to have been positively impacted.

While the company’s initiatives to focus on cost management resulted in controlled general and administrative expenses, advertising campaign and technology upgrades are expected to have led to an increase in overall expenses in the third quarter.

Earnings Whispers

According to our quantitative model, chances of Ameriprise beating the Zacks Consensus Estimate in the third quarter are low. This is because it does not have the right combination of the two key ingredients — a positive Earnings ESP and Zacks Rank #3 (Hold) or better.

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 +2.52%.

Zacks Rank: The company currently carries a Zacks Rank #4 (Sell).

Stocks That Warrant a Look

Here are some finance stocks that you may want to consider as these have the right combination of elements to post an earnings beat in their upcoming releases, per our model.

The Blackstone Group Inc BX has an Earnings ESP of +3.70% and a Zacks Rank #3 at present. The company is slated to release results on Oct 23.

Huntington Bancshares Incorporated HBAN is scheduled to release results on Oct 24. It presently has an Earnings ESP of +0.60% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Cullen/Frost Bankers, Inc CFR is expected to release results on Oct 31. It currently has an Earnings ESP of +0.07% and a Zacks Rank #3.

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