Ameriprise Financial, Inc.
) is scheduled to release first-quarter 2014 results Monday, Apr
28, after market close.
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In the last quarter, Ameriprise delivered a 2.8% positive
earnings surprise on the back of higher revenues and strong
assets under management (AUM) growth. Moreover, the company
reported earnings beats in all four quarters of 2013, with an
average surprise of 4.7%.
Can Ameriprise maintain its earnings streak this quarter? Or will
it disappoint? Let us see how things are shaping up for this
Factors to Impact Q1 Results
The overall market scenario remained sluggish and the interest
rate environment did not reverse in the quarter. Nevertheless, as
Ameriprise mainly deals with asset management and advisory
business, the low rate environment should not have any
significant impact on the company's top-line growth. It derives
more than 60% of its revenues (as of 2013) from fees.
Further, the overall equity market remained strong, though the
pace of improvement somewhat slackened this quarter. So
re-engagement of retail clients is likely to lose pace this
quarter, but strong AUM pipeline as well as continued rise in
demand for advisory services should more than offset the
On the other hand, the company's aggressive marketing strategy
will continue to keep distribution expenses high. Further,
Ameriprise continues to recruit experienced advisors that will
expectedly increase compensation expenses. So we don't expect the
rising expense trend to reverse this quarter.
Ameriprise failed to impress analysts with its level of
activities during the quarter. The Zacks Consensus Estimate for
the quarter remained unchanged at $1.87 per share over the last 7
Our proven model does not conclusively show that Ameriprise is
likely to beat the Zacks Consensus Estimate in the first quarter.
That is because a stock needs to have both a positive
and a Zacks Rank #3 (Hold) or better for this to happen.
Unfortunately, this is not the case here as you can see below.
The Earnings ESP for Ameriprise is -1.07%. This is because the
Most Accurate estimate stands at $1.85 while the Zacks Consensus
Estimate is higher, at $1.87.
Ameriprise's Zacks Rank #3 increases the predictive power of ESP.
However, we also need to have a positive ESP to be confident of
an earnings surprise call.
Stocks That Warrant a Look
Here are a few asset managers that you may want to consider, as
our model shows that these have the right combination of elements
to post an earnings beat this quarter.
AllianceBernstein Holding L.P.
) has an earnings ESP of +2.44% and carries a Zacks Rank #3. It
is scheduled to report results on Apr 30.
Legg Mason, Inc.
) has an earnings ESP of +1.12% and carries a Zacks Rank #3. It
is scheduled to report fiscal fourth-quarter and full-year 2014
results on May 1.
The earnings ESP for
) is +1.82% and it carries a Zacks Rank #1 (Strong Buy). It is
scheduled to report results on May 1.