Keeping alive its earnings streak of 2013,
Ameriprise Financial Inc.
) reported first-quarter 2014 operating earnings per share of
$2.04, which handily surpassed the Zacks Consensus Estimate of
$1.87. Moreover, the figure compared favorably with $1.59 per
share in the prior-year quarter.
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Results were primarily attributable to a rise in top line, driven
by strong performance across all segments. Moreover, assets under
management (AUM) and assets under administration continued to
grow. The company's capital deployment activities were also
encouraging. However, rise in expenses was a headwind in the
After taking into consideration integration and restructuring
charges, market impact on variable annuity guaranteed benefits,
index universal life benefits and net realized gains/losses,
Ameriprise's net income from continuing operations came in at
$401 million or $2.01 per share compared with $336 million or
$1.58 per share in the year-ago quarter.
Behind the Headlines
On an operating basis, net revenue climbed 7.8% year over year to
$2.8 billion. Further, it was in line with the Zacks Consensus
Operating expenses shot up 5.6% year over year to $2.3 billion.
The rise primarily resulted from increase in distribution
expenses, costs related to benefits, claims, losses and
settlement charges, amortization of deferred acquisition costs as
well as interest and debt expenses.
As of Mar 31, 2014, total AUM and assets under administration
were $782.8 billion, rising 10.6% year over year. The increase
was mainly driven by market appreciation and advisor client net
Capital Deployment Activities
In the reported quarter, Ameriprise repurchased 3.2 million
shares for $354 million. The company also returned $457 million
to its shareholders as quarterly dividends.
Along with the earnings release, Ameriprise's board of directors
authorized additional share repurchase of $2.5 billion through
Apr 28, 2016. Further, it announced a regular dividend payout of
58 cents, reflecting a 12% hike from the prior payout. The
dividend will be paid on May 23 to shareholders of record as of
As evident from its quarterly results, Ameriprise remains buoyed
on growth. Going forward, we expect the company's top-line
improvement to continue on the back of a relatively strong equity
market and consistent rise in AUM. However, Ameriprise's mounting
expenses amid a still low interest rate scenario and intense
competition keep us cautious.
At present, Ameriprise has a Zacks Rank #3 (Hold).
Performance of Other Investment Managers
Among other investment management firms,
The Blackstone Group L.P
T. Rowe Price Group, Inc
) beat the Zacks Consensus Estimate in their latest earnings
releases. The results of these companies were driven by
improvement in top line, partially offset by higher expenses.
Further, all three companies recorded impressive AUM growth.