Ameriprise (AMP) Beats on Q3 Earnings as Revenues & AUM Rise

Ameriprise Financial Inc.’s AMP third-quarter 2018 adjusted operating earnings per share of $3.74 surpassed the Zacks Consensus Estimate of $3.61. Further, the figure was 5% above the year-ago quarter level.

Results benefited from an improvement in revenues. Further, growth in assets under management (AUM) and assets under administration (AUA) supported earnings. However, rise in expenses was an undermining factor.

After taking into consideration several significant items, net income was $503 million or $3.43 per share compared with $507 million or $3.26 per share in the prior-year quarter.

Revenues Improve, Costs Rise

Net revenues (on a GAAP basis) were $3.29 billion for the quarter, reflecting an increase of 9% from the year-ago quarter. Moreover, it surpassed the Zacks Consensus Estimate of $3.19 billion.

On an operating basis, total adjusted net revenues were $3.27 billion, increasing 9% from the prior-year quarter.

Adjusted operating expenses were $2.62 billion, rising 14% from the prior-year quarter.

Strong AUM & AUA

As of Sep 30, 2018, total AUM and AUA was $913.46 billion, reflecting a year-over-year increase of 5%, primarily driven by Ameriprise advisor client net inflows.

Share Repurchases

In the reported quarter, Ameriprise repurchased 2.4 million shares for $353 million.

Our Take

Ameriprise’s efforts toward modifying its product and service-offering capacity are expected to support top-line growth in the quarters ahead. Further, its steady capital deployment activities reflect a strong balance sheet position.

However, despite the fact that the company has been taking initiatives to strengthen expense management, advertising campaign and technology upgrades is likely to 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 #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Asset Managers

BlackRock’s BLK third-quarter 2018 adjusted earnings of $7.52 per share outpaced the Zacks Consensus Estimate of $6.93. Results benefited from an improvement in revenues, rise in AUM and steady long-term inflows. The uptick in operating expenses was a dampening factor.

The Blackstone Group L.P. BX reported third-quarter 2018 economic net income (ENI) of 76 cents per share, which surpassed the Zacks Consensus Estimate of 73 cents. Results benefited from increase in revenues, which was supported by growth in AUM and inflows.

Invesco Ltd. IVZ reported third-quarter 2018 adjusted earnings of 66 cents per share, lagging the Zacks Consensus Estimate by a penny. Results were primarily supported by slight revenue growth and rise in AUM. However, increase in operating expenses was an undermining factor.

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