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Ameriprise (AMP) Q3 Earnings Beat Estimates, Costs Decline

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Ameriprise Financial Inc.’s (AMP - Free Report) third-quarter 2017 operating earnings per share of $3.53 comfortably surpassed the Zacks Consensus Estimate of $2.86. Also, the figure compares favourably with $1.37 per share registered in the year ago quarter.

Results benefitted from a decline in expenses. Also, growth in assets under management (AUM) and assets under administration (AUA) were on the positive side. However, a slight decline in revenues acted as a headwind.

After taking into consideration several significant items, net income for the reported quarter came in at $503 million or $3.24 per share, up from $215 million or $1.30 per share in the prior-year quarter.

Revenues & Expenses Decline

Net revenue (on a GAAP basis) was $2.98 billion, reflecting a marginal decline from the year-ago quarter figure of nearly $3 billion. However, the figure marginally surpassed the Zacks Consensus Estimate of $2.95 billion.

On an operating basis, total net revenues came in at $2.97 billion, increasing marginally from the prior-year quarter.

Operating expenses came in at $2.27 billion, decreasing 15.9% from the prior-year quarter.

Strong AUM & AUA

As of Sep 30, 2017, total AUM and AUA was $869.5 billion, reflecting an increase of 9% year over year, primarily driven by Ameriprise advisor client net inflows.

Capital Deployment

In the reported quarter, Ameriprise repurchased 2.3 million shares for $333 million.

Our Take

Ameriprise remains well positioned to grow inorganically through strategic acquisitions, given a solid liquidity position. Also, its efforts toward modifying its product and service-offering capacity are expected to support top-line growth in the quarters ahead.

Although the company’s initiatives to strengthen expense management resulted in controlled expenses, advertising campaign and technology upgrades are likely to keep expenses elevated in the near term.

AMERIPRISE FINANCIAL SERVICES, INC. Price, Consensus and EPS Surprise
 

AMERIPRISE FINANCIAL SERVICES, INC. Price, Consensus and EPS Surprise | AMERIPRISE FINANCIAL SERVICES, INC. Quote

At present, Ameriprise 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, Inc. (BLK - Free Report) reported third-quarter 2017 adjusted earnings of $5.92 per share, which outpaced the Zacks Consensus Estimate of $5.59. Results benefited from improvement in revenues, rise in AUM and steady long-term inflows. However, increase in operating expenses acted as headwind.

The Blackstone Group L.P. (BX - Free Report) reported third-quarter 2017 economic net income (ENI) of 69 cents per share, which topped the Zacks Consensus Estimate of 57 cents. Improvement in revenues gave a huge boost to earnings. Also, growth in assets under management continued to impress. However, an increase in expenses was an undermining factor.

Lazard Ltd. (LAZ - Free Report) is expected to report its results on Oct 26.

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