Ameriprise Financial Inc.
) fourth-quarter operating earnings of $1.71 per share
significantly outpaced the Zacks Consensus Estimate of $1.48.
Also, this was up 31% compared with the earnings of $1.31 in the
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Better-than-expected results were primarily driven by improved
top line, partially offset by a rise in operating expenses.
Further, assets under management and administration showed a
stark improvement in the quarter, while the company's ongoing
capital deployment activities were impressive.
After taking into consideration net realized gains or losses,
integration and restructuring charges, market impact on variable
annuity guaranteed living benefits, amortization of deferred
acquisition costs (DAC) and deferred sales inducement costs
(DSIC) as well as consolidation of certain investment entities,
Ameriprise's net income from continuing operations came in at
$388 million or $1.80 per share. This compares with net income of
$223 million or 95 cents per share in the year-ago quarter.
For 2012, operating net income stood at $1,245 million or $5.59
per share compared with $1,274 million or $5.17 per share in
2011. Earnings per share were significantly above the Zacks
Consensus Estimate of $5.37.
Performance in Detail
On an operating basis, total net revenues climbed 5.8% year over
year to $2.60 billion in the reported quarter. The rise was
primarily driven by strong advisor client net inflows, market
appreciation and increased client activity. These were partially
offset by a decline in net investment income and outflows in
asset management. Moreover, it was almost in line with the Zacks
For 2012, total net revenues (operating basis) were $10.1
billion, almost at par with 2011 levels. Yet, it was slightly
below the Zacks Consensus Estimate of $10.2 billion.
Operating expenses came in at $2.2 billion, rising 5.4% from the
year-ago quarter. The surge largely reflects higher benefits,
claims, losses and settlement expenses as well as interest and
debt expense, partly offset by lower distribution-related costs.
Total assets under management and administration were $681
billion, up 8% on a year-over year basis. The increase was mainly
due to market appreciation along with advisor client net inflows.
Capital Deployment Activities
During the reported quarter, Ameriprise bought back 5.9 million
shares for $350 million. Moreover, for 2012, the company bought
back 27.9 million shares for $1.34 billion.
Concurrent with the earnings release, Ameriprise announced a
quarterly cash dividend of 45 cents per share. The dividend is
payable on Feb 22 to the shareholders of record as of Feb 11.
) fourth-quarter adjusted earnings substantially exceeded the
Zacks Consensus Estimate, while
SEI Investments Co.
) reported in line. For both companies, the year-over-year
improvement was primarily attributable to increased top line,
partly offset by higher operating expenses.
Ameriprise's consistent capital deployment activities continue to
boost investors' confidence. Moreover, the company's prudent
expense management and robust balance sheet are among the
Further, improvement in retail client activity is expected to
fuel the operating leverage in the upcoming quarters.
Nevertheless, the prevailing low interest rate environment and
stringent regulatory landscape will keep the company's financials
slightly strained in the near term.
Among other investment management companies,
) is scheduled to declare its fourth quarter and full-year 2012
results on Feb 7, 2013.
Ameriprise currently retains a Zacks Rank #3 (Hold).