Ameriprise Financial Reports Third-Quarter Earnings Amid Rising Expenses
Ameriprise Financial’s AMP third-quarter 2024 adjusted operating earnings were $8.83 per share, slightly below the Zacks Consensus Estimate of $8.91. This represents an increase of 15% compared to the same quarter last year. If we exclude severance expenses, adjusted earnings improved to $9.02 per share.
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The company faced challenges from rising expenses, but growth in revenue and increases in assets under management (AUM) and assets under administration (AUA) helped mitigate these issues.
On a GAAP basis, net income for the quarter was $511 million or $5.00 per share, down from $872 million or $8.14 per share a year ago. Analysts had anticipated a higher net income of $919.1 million.
Improved Adjusted Revenues, Higher Expenses
Ameriprise’s adjusted operating total net revenues rose to $4.35 billion, marking an 11% increase year over year. This figure surpassed the Zacks Consensus Estimate of $4.31 billion.
GAAP net revenues reached $4.4 billion, representing a 12% increase from the previous year.
Adjusted operating expenses climbed to $3.3 billion, an 11% increase compared to the prior year. The projected adjusted expenses had been $3.05 billion. When excluding severance and unlocking expenses, adjusted operating total net expenses were $3.19 billion.
Total AUM and AUA grew by 22% year over year to reach $1.51 trillion, fueled by strong client inflows and positive market performance. This figure exceeded our estimate of $1.41 trillion.
During the quarter, Ameriprise repurchased 1.3 million shares at a cost of $563 million.
Outlook for Ameriprise
Increased expenses, primarily driven by technology upgrades, are likely to continue impacting AMP’s net earnings. Nonetheless, the company remains well-positioned for significant revenue growth, supported by its strong AUM and ongoing business restructuring efforts.
Ameriprise Financial, Inc. Price, Consensus, and EPS Surprise
Ameriprise Financial, Inc. price-consensus-eps-surprise-chart | Ameriprise Financial, Inc. Quote
Ameriprise currently holds a Zacks Rank #2 (Buy). You can view the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Comparative Performance of AMP’s Competitors
BlackRock’s BLK reported adjusted earnings of $11.46 per share for the third quarter of 2024, significantly exceeding the Zacks Consensus Estimate of $10.34. This reflects a 5% increase from the same quarter last year.
BlackRock’s results benefitted from revenue growth and an increase in non-operating income, with AUM reaching $11.45 trillion thanks to strong net inflows and market appreciation. However, higher expenses presented challenges.
Invesco’s IVZ third-quarter adjusted earnings of 44 cents per share matched the Zacks Consensus Estimate and represented a 25.7% increase from the previous year.
The improvement in Invesco’s earnings was driven by a decrease in adjusted expenses and increases in adjusted net revenues, along with growth in AUM from solid inflows.
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The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
