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Ameriprise's (AMP) Q2 Earnings and Revenues Miss Estimates
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Ameriprise Financial Inc. (AMP - Free Report) reported second-quarter 2016 operating earnings per share of $2.23, missing the Zacks Consensus Estimate of $2.27. The figure also represents a year-over-year decrease of 4.5%.
The results came in lower than expected primarily due to a drop in revenues. However, a decline in operating expenses and 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 $335 million, down 23.88% year over year.
Net revenue (on a GAAP basis) was $2.87 billion, down 9% from the year-ago quarter. The figure also missed the Zacks Consensus Estimate of $2.91 billion. On an operating basis, net revenue came in at $2.86 billion, marking a fall of 4.45% from the prior-year quarter. This reflected lower average equity and other markets as well as asset management outflows.
Operating expenses came in at $2.38 billion, down 1% from the prior-year quarter owing to lower distribution expenses and well-controlled general and administrative expenses.
Strong AUM & AUA
As of Jun 30, 2016, total assets under management and administration totaled $776.59 billion, compared with $772.73 billion in the prior quarter. Ameriprise’s advisor client net inflows were more than offset by the adverse impact of foreign exchange rates related to the U.K. referendum and net asset management outflows.
Share Repurchases & Dividends
In the reported quarter, Ameriprise repurchased 4.7 million shares for $444 million. Also, the company declared a quarterly dividend of 75 cents per common share. The dividend will be paid on Aug 19, 2016, to shareholders of record as of Aug 8.
Our Viewpoint
Growth at Ameriprise remained subdued due to increased volatility in the equity market. Though consistent net outflows in the Asset Management segment continued to strain Ameriprise’s overall revenue-generation capacity, we expect the top line to improve in the upcoming quarters, driven by its focus on business growth and strong capital position.
At present, Ameriprise has a Zacks Rank #4 (Sell).
Performance of Other Investment Managers
BlackRock, Inc.’s (BLK - Free Report) second-quarter 2016 adjusted earnings of $4.78 per share lagged the Zacks Consensus Estimate of $4.79 by a penny. Also, the bottom line came in 4% lower than the year-ago quarter figure.
The Blackstone Group L.P. (BX - Free Report) reported second-quarter 2016 economic net income of 44 cents per share, which surpassed the Zacks Consensus Estimate of 40 cents.
T. Rowe Price Group, Inc. (TROW - Free Report) reported second-quarter 2016 net income of 76 cents per share, missing the Zacks Consensus Estimate of $1.13. Increase in AUM was a positive factor while a decline in revenues and elevated operating expenses were a drag.
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Ameriprise's (AMP) Q2 Earnings and Revenues Miss Estimates
Ameriprise Financial Inc. (AMP - Free Report) reported second-quarter 2016 operating earnings per share of $2.23, missing the Zacks Consensus Estimate of $2.27. The figure also represents a year-over-year decrease of 4.5%.
The results came in lower than expected primarily due to a drop in revenues. However, a decline in operating expenses and 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 $335 million, down 23.88% year over year.
Cost Containment Failed to Offset Revenue Decline
Net revenue (on a GAAP basis) was $2.87 billion, down 9% from the year-ago quarter. The figure also missed the Zacks Consensus Estimate of $2.91 billion. On an operating basis, net revenue came in at $2.86 billion, marking a fall of 4.45% from the prior-year quarter. This reflected lower average equity and other markets as well as asset management outflows.
Operating expenses came in at $2.38 billion, down 1% from the prior-year quarter owing to lower distribution expenses and well-controlled general and administrative expenses.
Strong AUM & AUA
As of Jun 30, 2016, total assets under management and administration totaled $776.59 billion, compared with $772.73 billion in the prior quarter. Ameriprise’s advisor client net inflows were more than offset by the adverse impact of foreign exchange rates related to the U.K. referendum and net asset management outflows.
Share Repurchases & Dividends
In the reported quarter, Ameriprise repurchased 4.7 million shares for $444 million. Also, the company declared a quarterly dividend of 75 cents per common share. The dividend will be paid on Aug 19, 2016, to shareholders of record as of Aug 8.
Our Viewpoint
Growth at Ameriprise remained subdued due to increased volatility in the equity market. Though consistent net outflows in the Asset Management segment continued to strain Ameriprise’s overall revenue-generation capacity, we expect the top line to improve in the upcoming quarters, driven by its focus on business growth and strong capital position.
AMERIPRISE FINL Price, Consensus and EPS Surprise
AMERIPRISE FINL Price, Consensus and EPS Surprise | AMERIPRISE FINL Quote
At present, Ameriprise has a Zacks Rank #4 (Sell).
Performance of Other Investment Managers
BlackRock, Inc.’s (BLK - Free Report) second-quarter 2016 adjusted earnings of $4.78 per share lagged the Zacks Consensus Estimate of $4.79 by a penny. Also, the bottom line came in 4% lower than the year-ago quarter figure.
The Blackstone Group L.P. (BX - Free Report) reported second-quarter 2016 economic net income of 44 cents per share, which surpassed the Zacks Consensus Estimate of 40 cents.
T. Rowe Price Group, Inc. (TROW - Free Report) reported second-quarter 2016 net income of 76 cents per share, missing the Zacks Consensus Estimate of $1.13. Increase in AUM was a positive factor while a decline in revenues and elevated operating expenses were a drag.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>