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What's in the Cards for Ameriprise (AMP) in Q3 Earnings?

Ameriprise Financial, Inc. AMP is scheduled to report third-quarter 2020 results on Oct 28, after market close. Its earnings and revenues are anticipated to have witnessed a decline in the quarter on a year-over-year basis.

In the last reported quarter, the company’s earnings lagged the Zacks Consensus Estimate. Results were primarily hurt by a decline in revenues, partly offset by lower expenses. However, an improvement in assets under management (AUM) and assets under administration (AUA) balance were tailwinds.

Ameriprise does not have an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in two and lagged in two of the trailing four quarters, the average beat being 8.8%.

Ameriprise Financial, Inc. Price and EPS Surprise

 

Ameriprise Financial, Inc. Price and EPS Surprise

Ameriprise Financial, Inc. price-eps-surprise | Ameriprise Financial, Inc. Quote

Notably, the Zacks Consensus Estimate for the company’s third-quarter earnings is pegged at $1.35 per share, which indicates a decline of 68.2% from the prior-year quarter’s reported number. The estimate has been unchanged over the past seven days.

Before we take a look at what our quantitative model predicts, let’s check the factors that are likely to have influenced the company’s performance in the third quarter.

Estimates & Key Factors to Note

The Zacks Consensus Estimate for management and financial advice fees (constituting more than 60% of the company’s total net revenues) is pegged at $1.86 billion for the to-be-reported quarter, which suggests a rise of 9% from the prior quarter’s reported number.

The consensus estimate for distribution fees of $380 million indicates a rise of 1.3% sequentially. Also, the consensus estimate for net investment income of $324 million suggests 6.2% growth from the previous quarter’s reported figure.

The consensus estimate for premiums is pegged at $99 million, indicating 26.9% sequential growth. Likewise, the consensus mark for other revenues of $332 million indicates a 23% sequential rise.

Thus, driven by an expected increase in all the components of revenues, total revenues are expected to have witnessed a rise in the third quarter on a sequential basis.

However, the Zacks Consensus Estimate for total sales is pegged at $2.99 billion, which suggests a 10% decline from the year-ago quarter’s reported figure.

Notably, the company’s Asset Management segment has been recording net outflows over the past several quarters, which has been negatively impacting asset growth. However, the Advice & Wealth Management segment is likely to have recorded growth in assets in the third quarter, based on expectations of improved advisor productivity.

While Ameriprise’s initiatives to focus on cost management have resulted in controlled general and administrative expenses in the past, overall costs are anticipated to have remained elevated in the third quarter due to costs related to technology upgrades.

Notably, management expects adjusted operating earnings in the third quarter to include an after-tax non-cash unfavorable impact of $350 million as a result of the annual review of insurance and annuity valuation assumptions and models.

Earnings Whispers

According to our quantitative model, it cannot be conclusively predicted whether Ameriprise will be able to beat the Zacks Consensus Estimate this time. This is because it does not have the right combination of the two key ingredients — a positive Earnings ESP and Zacks Rank #3 (Hold) or better, which is required to be confident of an earnings beat.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: Ameriprise has an Earnings ESP of 0.00%.

Zacks Rank: The company currently carries a Zacks Rank #3.

Stocks to Consider

Here are a few finance stocks that you may want to consider, as according to our model, these have the right combination of elements to post an earnings beat in their upcoming releases.

The Earnings ESP for CullenFrost Bankers CFR is +1.57% and the company carries a Zacks Rank of 3 at present. It is slated to report quarterly results on Oct 29. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Moody's Corporation MCO is set to release earnings figures on Oct 29. The company, which carries a Zacks Rank #2 (Buy) at present, has an Earnings ESP of +1.93%.

The Earnings ESP for BankUnited BKU is +6.10% and the company carries a Zacks Rank #3, currently. It is scheduled to report quarterly numbers on Oct 28.

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

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