A month has gone by since the last earnings report for Ameriprise Financial Services (NYSE:AMP). Shares have added about 5.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Ameriprise due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Ameriprise Q3 Earnings Beat, Revenues Rise Marginally
Ameriprise’s third-quarter 2019 adjusted operating earnings per share (excluding unlocking) of $4.24 surpassed the Zacks Consensus Estimate of $3.97. Further, the figure was 8.2% higher than the year-ago quarter.
Results benefited from a marginal improvement in revenues, and growth in AUM and assets under administration (AUA). Moreover, the company witnessed a marginal decline in expenses.
After taking into consideration several significant items, net income was $543 million or $4.04 per share, up from $503 million or $3.43 per share reported in the prior-year quarter.
Revenues Improve, Costs Decline
Net revenues (on a GAAP basis) were $3.32 billion, up marginally year over year. Moreover, the figure beat the Zacks Consensus Estimate of $2.96 billion. On an operating basis, total adjusted net revenues were $3.30 billion, up marginally year over year.
Adjusted operating expenses were $2.65 billion, down marginally from the prior-year quarter.
AUM & AUA Improve Marginally
As of Sep 30, 2019, total AUM and AUA was $921.28 billion, up nearly 1% year over year.
Capital Deployment
In the reported quarter, Ameriprise returned $676 million to shareholders in forms of share repurchases and dividends.
Outlook
The company is well-poised to return roughly 110% of operating earnings to shareholders in 2019 and fund bank capital requirements, while evaluating uses of excess capital.
Pre-tax margin for the Asset Management segment is expected to be 35-39% in the quarters ahead.
Long-Term Outlook
Management targets 6-8% growth in adjusted operating net revenues. Further, adjusted operating earnings are projected to grow in the range of 12-15%. Adjusted operating return on equity excluding AOCI is anticipated to be 19-23%.
How Have Estimates Been Moving Since Then?
It turns out, estimates review flatlined during the past month.
VGM Scores
Currently, Ameriprise has a nice Growth Score of B, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Ameriprise has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Ameriprise Financial, Inc. (AMP): Free Stock Analysis Report
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