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Ameriprise (AMP) Earnings: What's in Store for the Stock?

Ameriprise Financial, Inc. AMP is scheduled to report first-quarter 2016 results after the market closes on Wednesday, Apr 27.

Last quarter, Ameriprise’s earnings surpassed the Zacks Consensus Estimate, benefiting from relatively stable revenues. However, this was partially offset by a slight rise in expenses.

Notably, Ameriprise has surpassed the Zacks Consensus Estimates in three of the trailing four quarters, as shown in the chart below:

Hence, will Ameriprise be able to maintain its earnings streak? Let’s check what our quantitative model predicts.

Our proven model does not conclusively show that Ameriprise will be able to beat earnings this time. Note that a stock needs to have both a positive">Earnings ESP and a Zacks Rank #1 (Strong Buy) or at least 2 (Buy) or 3 (Hold) to have a significantly higher chance of beating earnings.

Zacks ESP: The Earnings ESP for Ameriprise is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at $2.20.

Zacks Rank: Ameriprise’s Zacks Rank #3 increases the predictive power of ESP. But we need to have positive ESP to be sure of earnings beat.

Factors to Influence Results

We expect Advice & Wealth Management segment’s (AWM) performance to primarily drive Ameriprise’s first-quarter results. The AWM segment had delivered strong growth in assets and revenues in the previous quarter. Based on expectations of improved advisor productivity, management expects the same to continue in the to-be-reported quarter.

On the downside, we expect equity market volatility that triggered notable outflows in the Asset Management segment in the previous quarter, to get reflected in the upcoming announcement too.

Further, management expects another $1 billion of outflows due to a large client redeeming assets for liquidity purposes. Separately, the company expects another $700 million of outflows from Marsico-managed institutional separately managed accounts in the first quarter.

Moreover, lower spot assets under management (down 4% year over year) in the beginning of the first quarter are expected to limit the company’s revenue-generating capabilities in the upcoming release.

Additionally, weak equity markets experienced during the quarter will likely exert strain on Ameriprise’s margin. Moreover, costs associated with advertising and technology upgrades are anticipated to ramp up the company’s expenses. However, management’s focus on keeping general and administrative expenses flat on a yearly basis, will likely keep total expenses under check.

Nonetheless, Ameriprise’s activities during the quarter were inadequate to win analysts confidence. As a result, the Zacks Consensus Estimate for the quarter declined by a penny to $2.20 over the last seven days.

Stocks That Warrant a Look

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

Affiliated Managers Group Inc. AMG has an Earnings ESP of +0.68% and carries a Zacks Rank #2. It is expected to report results on Apr 26.

The Earnings ESP for Waddell & Reed Financial, Inc. WDR is +1.82%. The company carries a Zacks Rank #3, and is slated to report on Apr 26.

Federated Investors, Inc. FII has an Earnings ESP of +2.33% and carries a Zacks Rank #3. The company is scheduled to report results on Apr 28.

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WADDELL&REED -A (WDR): Free Stock Analysis Report
AMERIPRISE FINL (AMP): Free Stock Analysis Report
FEDERATED INVST (FII): Free Stock Analysis Report
AFFIL MANAGERS (AMG): Free Stock Analysis Report
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