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Ameriprise (AMP) Down on Q3 Earnings Miss, Revenues Up
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Shares of Ameriprise Financial Inc. (AMP - Free Report) declined nearly 1.3% in the after-market trading following the release of its third-quarter 2016 results. Operating earnings (excluding annual unlocking) per share of $2.29 missed the Zacks Consensus Estimate of $2.41. However, the figure represents a year-over-year increase of 4%.
The results came in lower than expected primarily due to escalated operating expenses. However, a rise in revenues and the increase in assets under management (“AUM”) and assets under administration (“AUA”) were on the positive side.
After considering several significant items, net income attributable to shareholders came in at $215 million, down 46% year over year.
Net revenue (on a GAAP basis) was $3.0 billion, up 4% from the year-ago quarter. The figure also surpassed the Zacks Consensus Estimate of $2.9 billion. On an operating basis, total net revenue (excluding unlocking) came in at $2.89 billion, relatively stable with the prior-year quarter. This reflected the impact of wrap net inflows and higher average equity markets compared to the last year, offset by the impact of asset management outflows and lower client transactional activity.
Operating expenses (excluding unlocking) came in at $2.4 billion, up nearly 1% from the prior-year quarter primarily due to higher interest and debt expense, and interest credited to fixed accounts.
Strong AUM & AUA
As of Sep 30, 2016, total AUM and AUA totaled $795.6 billion, up nearly 2% from the prior quarter. Ameriprise’s advisor client net inflows and market appreciation were partially offset by the asset management net outflows and the unfavorable impact of foreign exchange rates.
Share Repurchases
In the reported quarter, Ameriprise repurchased 3.9 million shares for $378 million.
Our Viewpoint
Ameriprise’s discipline in financial planning as well as strengths in product development and advice will help it meet the dynamic market needs and help support top-line growth. Also, the company’s inorganic growth strategy will further aid its profitability in the near term.
However, the company’s fixed interest costs and claims continue to remain at high levels. In addition, continued equity market volatility and outflows in the Asset Management segment as well as elevated expenses will likely hurt the company’s financials in the near term.
Among other Investment Managers, The Blackstone Group L.P. (BX - Free Report) , T. Rowe Price Group, Inc. (TROW - Free Report) and Lazard Ltd. (LAZ - Free Report) are scheduled to announce their quarterly results on Oct 27.
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Ameriprise (AMP) Down on Q3 Earnings Miss, Revenues Up
Shares of Ameriprise Financial Inc. (AMP - Free Report) declined nearly 1.3% in the after-market trading following the release of its third-quarter 2016 results. Operating earnings (excluding annual unlocking) per share of $2.29 missed the Zacks Consensus Estimate of $2.41. However, the figure represents a year-over-year increase of 4%.
The results came in lower than expected primarily due to escalated operating expenses. However, a rise in revenues and the increase in assets under management (“AUM”) and assets under administration (“AUA”) were on the positive side.
After considering several significant items, net income attributable to shareholders came in at $215 million, down 46% year over year.
Higher Revenues Fail to Offset Escalated Expenses
Net revenue (on a GAAP basis) was $3.0 billion, up 4% from the year-ago quarter. The figure also surpassed the Zacks Consensus Estimate of $2.9 billion. On an operating basis, total net revenue (excluding unlocking) came in at $2.89 billion, relatively stable with the prior-year quarter. This reflected the impact of wrap net inflows and higher average equity markets compared to the last year, offset by the impact of asset management outflows and lower client transactional activity.
Operating expenses (excluding unlocking) came in at $2.4 billion, up nearly 1% from the prior-year quarter primarily due to higher interest and debt expense, and interest credited to fixed accounts.
Strong AUM & AUA
As of Sep 30, 2016, total AUM and AUA totaled $795.6 billion, up nearly 2% from the prior quarter. Ameriprise’s advisor client net inflows and market appreciation were partially offset by the asset management net outflows and the unfavorable impact of foreign exchange rates.
Share Repurchases
In the reported quarter, Ameriprise repurchased 3.9 million shares for $378 million.
Our Viewpoint
Ameriprise’s discipline in financial planning as well as strengths in product development and advice will help it meet the dynamic market needs and help support top-line growth. Also, the company’s inorganic growth strategy will further aid its profitability in the near term.
However, the company’s fixed interest costs and claims continue to remain at high levels. In addition, continued equity market volatility and outflows in the Asset Management segment as well as elevated expenses will likely hurt the company’s financials in the near term.
AMERIPRISE FINL Price, Consensus and EPS Surprise
AMERIPRISE FINL Price, Consensus and EPS Surprise | AMERIPRISE FINL Quote
At present, Ameriprise carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.
Among other Investment Managers, The Blackstone Group L.P. (BX - Free Report) , T. Rowe Price Group, Inc. (TROW - Free Report) and Lazard Ltd. (LAZ - Free Report) are scheduled to announce their quarterly results on Oct 27.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>