Ameriprise Financial Inc. Earnings: Profit Drop Breaks Four Consecutive Quarters of Growing Profits

S&P 500 (NYSE:SPY) component Ameriprise Financial Inc. (NYSE:AMP) reported its results for the third quarter. Ameriprise Financial provides financial planning, products, and services through its subsidiaries. The company offers solutions for its clients’ cash and liquidity, asset accumulation, income protection, and estate and wealth transfer needs.

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Ameriprise Financial Earnings Cheat Sheet for the Third Quarter

Results: Net income for the asset management company fell to $271 million ($1.12 per share) vs. $344 million ($1.32 per share) a year earlier. This is a decline of 21.2% from the year earlier quarter.

Actual vs. Wall St. Expectations: The mean estimate for AMP was $1.22 per share.

Quoting Management: “We continued to demonstrate the strength and resilience of our business despite a challenging market environment,” said Jim Cracchiolo, chairman and chief executive officer. “Operating net revenues increased eight percent, and we delivered solid underlying business results, apart from the DAC-related impacts. Client acquisition and advisor recruiting remained strong, and our advisor productivity was near all-time highs. “We are maintaining our investments for future growth while managing expenses and our financial foundation prudently. Our financial strength continues to enable us to return significant capital to shareholders. In fact, our excess capital position remains above $2.0 billion even after we accelerated our share repurchase activity, allocating $447 million for share repurchases in the quarter.”

Key Stats:

Last quarter’s profit decrease breaks a streak of four consecutive quarters of year-over-year profit increases. In the second quarter, net income rose 19.3% from the year earlier, while the figure increased 12.6% in the first quarter, 18.1% in the fourth quarter of the last fiscal year and 32.3% in the third quarter of the last fiscal year.

Looking Forward: Over the past ninety days, the average estimate for the fourth quarter has fallen from $1.51 per share to $1.40, indicating that analysts are growing pessisimistic about the company’s performance next quarter. At $5.23 per share, the average estimate for the fiscal year has fallen from $5.60 ninety days ago.

Competitors to Watch: Financial Engines Inc (NASDAQ:FNGN), Oppenheimer Hldgs. Inc. (NYSE:OPY), Raymond James Financial, Inc. (NYSE:RJF), LPL Investment Hldgs. Inc. (NASDAQ:LPLA), Principal Financial Group, Inc. (NYSE:PFG), Stifel Financial Corp. (NYSE:SF), Prudential Financial, Inc. (NYSE:PRU), MetLife, Inc. (NYSE:MET), Bank of America Corp. (NYSE:BAC), Citigrouo (NYSE:C), Bank of America (NYSE:BAC), Morgan Stanley (NYSE:MS) and TD Ameritrade Holding Corp. (NASDAQ:AMTD).

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(Source: Xignite Financials)

 

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