Ameriprise Earnings Beat on Strong AUM - Analyst Blog


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Ameriprise Financial Inc. ( AMP ) reported fourth-quarter 2013 operating earnings per share of $1.87, which outpaced the Zacks Consensus Estimate of $1.82. Moreover, this was above the prior-year quarter figure of $1.71. With this, the company delivered positive earnings surprises in all four quarters of 2013.

For full-year 2013, Ameriprise's operating earnings per share of $7.05 surpassed the Zacks Consensus Estimate of $7.00. Also, it came in well above the prior-year figure of $5.59.

Ameriprise's impressive results were primarily driven by a rise in revenues, partially offset by higher expenses. Further, assets under management (AUM) and assets under administration showed improvement. The company's capital deployment activities were encouraging as well.

After taking into consideration integration and restructuring charges, market impact on index universal life benefits and net realized gains/losses, Ameriprise's net income from continuing operations came in at $298 million or $1.47 per share compared with $388 million or $1.80 per share in the year-ago quarter. For 2013, it stood at $1.3 billion or $6.46 per share, up from the prior-year figure of $1.0 billion or $4.63 per share.

Behind the Headlines

On an operating basis, net revenue climbed 8.4% year over year to $2.8 billion, while it was in line with the Zacks Consensus Estimate.

For full-year 2013, operating net revenue was up 7.0% year over year to $10.9 billion. Also, it surpassed the Zacks Consensus Estimate of $10.8 billion.  

Operating expenses increased 6.6% year over to $2.3 billion. The rise primarily resulted from higher distribution costs and costs related to benefits, claims, losses and settlement expenses, partly offset by lower amortization costs.

As of Dec 31, 2013, total AUM and assets under administration were $771.3 billion, rising 13.2% year over year. The increase was mainly due to market appreciation and advisor client net inflow.

Notably, Ameriprise's Asset Management and Advice & Wealth Management segments witnessed a significant year-over-year improvement, increasing 38% and 36%, respectively.

Capital Deployment Activities

In the reported quarter, Ameriprise repurchased 3.5 million shares for $371 million. The company also returned $104 million to its shareholders as quarterly dividends.

Our Viewpoint

Ameriprise's results reflect an impressive year. Further, consistent capital deployment activities continue to boost investors' confidence. We believe a sound balance sheet and a strong equity market will drive bottom-line improvement going forward. However, the company's financials may remain under pressure owing to the macro economic headwinds across the industry.

At present, Ameriprise holds a Zacks Rank #2 (Buy).

Performance of Other Investment Managers

Among other investment management firms, The Blackstone Group L.P. ( BX ), BlackRock, Inc. ( BLK ) and Invesco Ltd. ( IVZ ) beat the Zacks Consensus Estimate in their latest earnings releases. Results benefited from top-line growth, partially offset by higher expenses. Further, all three companies recorded impressive AUM growth.

AMERIPRISE FINL (AMP): Free Stock Analysis Report

BLACKROCK INC (BLK): Free Stock Analysis Report

BLACKSTONE GRP (BX): Free Stock Analysis Report

INVESCO LTD (IVZ): Free Stock Analysis Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Earnings , Stocks
Referenced Stocks: AMP , BLK , BX , IVZ

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