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Why is Earnings Beat Less Likely for Ameriprise (AMP) in Q2?
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Ameriprise Financial, Inc. (AMP - Free Report) is scheduled to report second-quarter 2018 results on Jul 24, after the market closes. Its earnings and revenues in the to-be-reported quarter are expected to grow year over year.
In the last reported quarter, the company’s earnings surpassed the Zacks Consensus Estimate. Results benefited from an improvement in revenues. Also, growth in assets under management (AUM) and assets under administration (AUA) was on the positive side. However, rise in expenses acted as a headwind.
Moreover, the company has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average beat being 10.6%.
However, activities of the company during the second quarter failed to encourage analysts to revise earnings estimates upward. As a result, the Zacks Consensus Estimate for earnings of $3.51 for the to-be-reported quarter decreased nearly 1% over the past 30 days. Nonetheless, the figure represents growth of 25.4% on a year-over-year basis.
Also, the Zacks Consensus Estimate for sales is $3.09 billion, which reflects an improvement of 3.5% year over year.
However, the company’s price performance has not been very encouraging. Its shares have lost 22.6% in the past six months compared with 14.3% decline of the industry.
Will the price performance improve post Q2 earnings release? To a great extent, this depends on the company’s ability to maintain its trend of beating earnings estimates.
Before we take a look at what our quantitative model predicts, let’s check the factors that are likely to influence the quarter’s results.
Factors to Influence Q2 Results
Ameriprise has been consistently making efforts to improve business. This is expected to have a positive impact on its profitability during the quarter under review.
Further, we expect the Advice & Wealth Management segment’s (AWM) performance to continue driving the company’s results in the second quarter. The segment witnessed year-over-year growth in assets in the last reported quarter. Based on expectations of improved advisor productivity, the same is expected to continue in the to-be-reported quarter.
However, the Asset Management segment has been witnessing elevated levels of outflows for the last few quarters. In fact, as the company continues to make changes to enhance financial performance, outflows are expected to continue in the to-be-reported quarter. This might affect the segment’s performance.
Earnings Whispers
According to our quantitative model, chances of Ameriprise beating the Zacks Consensus Estimate in the second quarter are low. This is because it does not have the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better — to increase the odds of an earnings beat.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Earnings ESP: Ameriprise has an Earnings ESP of -3.23%.
Zacks Rank: Ameriprise currently carries a Zacks Rank #2 (Buy). While this increases the predictive power of ESP, we also need a positive ESP to be confident of an earnings beat.
Stocks That Warrant a Look
Here are a few stocks that you may want to consider, as according to our model, these have the right combination of elements to post an earnings beat this quarter.
BankUnited, Inc. (BKU - Free Report) has an Earnings ESP of +0.29% and carries a Zacks Rank of 3. The company is slated to release results on Jul 24.
Hilltop Holdings Inc. (HTH - Free Report) is also slated to release results on Jul 26. It has an Earnings ESP of +0.40% and carries a Zacks Rank #3.
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Image: Bigstock
Why is Earnings Beat Less Likely for Ameriprise (AMP) in Q2?
Ameriprise Financial, Inc. (AMP - Free Report) is scheduled to report second-quarter 2018 results on Jul 24, after the market closes. Its earnings and revenues in the to-be-reported quarter are expected to grow year over year.
In the last reported quarter, the company’s earnings surpassed the Zacks Consensus Estimate. Results benefited from an improvement in revenues. Also, growth in assets under management (AUM) and assets under administration (AUA) was on the positive side. However, rise in expenses acted as a headwind.
Moreover, the company has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average beat being 10.6%.
Ameriprise Financial, Inc. Price and EPS Surprise
Ameriprise Financial, Inc. Price and EPS Surprise | Ameriprise Financial, Inc. Quote
However, activities of the company during the second quarter failed to encourage analysts to revise earnings estimates upward. As a result, the Zacks Consensus Estimate for earnings of $3.51 for the to-be-reported quarter decreased nearly 1% over the past 30 days. Nonetheless, the figure represents growth of 25.4% on a year-over-year basis.
Also, the Zacks Consensus Estimate for sales is $3.09 billion, which reflects an improvement of 3.5% year over year.
However, the company’s price performance has not been very encouraging. Its shares have lost 22.6% in the past six months compared with 14.3% decline of the industry.
Will the price performance improve post Q2 earnings release? To a great extent, this depends on the company’s ability to maintain its trend of beating earnings estimates.
Before we take a look at what our quantitative model predicts, let’s check the factors that are likely to influence the quarter’s results.
Factors to Influence Q2 Results
Ameriprise has been consistently making efforts to improve business. This is expected to have a positive impact on its profitability during the quarter under review.
Further, we expect the Advice & Wealth Management segment’s (AWM) performance to continue driving the company’s results in the second quarter. The segment witnessed year-over-year growth in assets in the last reported quarter. Based on expectations of improved advisor productivity, the same is expected to continue in the to-be-reported quarter.
However, the Asset Management segment has been witnessing elevated levels of outflows for the last few quarters. In fact, as the company continues to make changes to enhance financial performance, outflows are expected to continue in the to-be-reported quarter. This might affect the segment’s performance.
Earnings Whispers
According to our quantitative model, chances of Ameriprise beating the Zacks Consensus Estimate in the second quarter are low. This is because it does not have the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better — to increase the odds of an earnings beat.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Earnings ESP: Ameriprise has an Earnings ESP of -3.23%.
Zacks Rank: Ameriprise currently carries a Zacks Rank #2 (Buy). While this increases the predictive power of ESP, we also need a positive ESP to be confident of an earnings beat.
Stocks That Warrant a Look
Here are a few stocks that you may want to consider, as according to our model, these have the right combination of elements to post an earnings beat this quarter.
BankUnited, Inc. (BKU - Free Report) has an Earnings ESP of +0.29% and carries a Zacks Rank of 3. The company is slated to release results on Jul 24.
SVB Financial Group is slated to report second-quarter 2018 results on Jul 26. It has an Earnings ESP of +1.26% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Hilltop Holdings Inc. (HTH - Free Report) is also slated to release results on Jul 26. It has an Earnings ESP of +0.40% and carries a Zacks Rank #3.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>