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Ameriprise Financial Inc. Reports Operating Results (10-Q)

August 08, 2012 | About:
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10qk

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Ameriprise Financial Inc. (AMP) filed Quarterly Report for the period ended 2012-06-30.

Ameriprise Financial, Inc. has a market cap of $11.51 billion; its shares were traded at around $54.5 with a P/E ratio of 10.6 and P/S ratio of 1.1. The dividend yield of Ameriprise Financial, Inc. stocks is 2.7%.

Highlight of Business Operations:

Net revenues decreased $109 million, or 4%, for the second quarter of 2012 compared to the prior year period primarily due to lower investment income from continued low interest rates and volatile equity markets. These market-driven impacts were partially offset by growth in fee-based revenues driven by Ameriprise advisor client net inflows. In addition, the prior year period included a $27 million gain from an interest rate hedge. Net income from continuing operations attributable to Ameriprise Financial per diluted share decreased 22% for the second quarter of 2012 compared to the prior year period. Net income from continuing operations attributable to Ameriprise Financial decreased $95 million, or 30%, for the second quarter of 2012 compared to the prior year period reflecting an unfavorable impact from a tax-related item primarily related to an out-of-period correction, a $16 million negative impact from continued low interest rates and an $18 million after-tax gain from an interest rate hedge in the prior year period. The tax-related item was a decrease to earnings of $40 million, or $0.18 per diluted share, for the second quarter of 2012. Return on equity from continuing operations excluding accumulated other comprehensive income was 12.3% for the twelve months ended June 30, 2012 compared to 13.5% for the prior year period.

Net revenues decreased $80 million, or 2%, for the six months ended June 20, 2012 compared to the prior year period primarily due to lower investment income from continued low interest rates and volatile equity markets. In addition, the prior year period included a $27 million gain from an interest rate hedge. Net income from continuing operations attributable to Ameriprise Financial per diluted share decreased 17% for the six months ended June 20, 2012 compared to the prior year period. Net income from continuing operations attributable to Ameriprise Financial decreased $162 million, or 26%, for the six months ended June 20, 2012 compared to the prior year period reflecting the market impact on variable annuity guaranteed living benefits (net of hedges and the related DSIC and DAC amortization), an unfavorable impact from a tax-related item primarily related to an out-of-period correction and a $37 million negative impact from continued low interest rates, as well as an $18 million after-tax gain from an interest rate hedge in the prior year period. The market impact on variable annuity guaranteed living benefits (net of hedges and the related DSIC and DAC amortization), after-tax, was a decrease to earnings of $83 million, or $0.36 per diluted share, for the six months ended June 20, 2012 compared to a decrease of $18 million, or $0.07 per diluted share, for the prior year period. The tax-related item was a decrease to earnings of $40 million, or $0.17 per diluted share, for the six months ended June 30, 2012.

Operating net revenues decreased $74 million, or 3%, for the second quarter of 2012 compared to the prior year period primarily due to lower investment income from continued low interest rates and volatile equity markets. These market-driven impacts were partially offset by growth in fee-based revenues driven by Ameriprise advisor client net inflows. In addition, the prior year period included a $27 million gain from an interest rate hedge. Operating earnings per diluted share decreased 15% for the second quarter of 2012 compared to the prior year period. Operating earnings decreased $79 million, or 24%, for the second quarter of 2012 compared to the prior year period reflecting an unfavorable impact from a tax-related item primarily related to an out-of-period correction, a $16 million negative impact from continued low interest rates and an $18 million after-tax gain from an interest rate hedge in the prior year period. The tax-related item was a decrease to earnings of $40 million, or $0.18 per

Net revenues decreased $109 million, or 4%, for the second quarter of 2012 compared to the prior year period primarily due to lower investment income from continued low interest rates and volatile equity markets. These market-driven impacts were partially offset by growth in fee-based revenues driven by Ameriprise advisor client net inflows. In addition, the prior year period included a $27 million gain from an interest rate hedge. Net revenues of CIEs decreased $24 million compared to the prior year period primarily due to lower other revenues of CIEs. Management and financial advice fees decreased $20 million, or 2%, for the second quarter of 2012 compared to the prior year period due to lower asset-based fees driven by a decline in average AUM. Average AUM decreased $4.0 billion, or 1%, compared to the prior year period. See our discussion on the changes in AUM in our segment results of operations section below. Distribution fees decreased $20 million, or 5%, for the second quarter of 2012 compared to the prior year period due to lower asset-based fees driven by a decline in average AUM and lower transactional revenues. Net investment income decreased $26 million, or 5%, compared to the prior year period reflecting a decrease in investment income on fixed maturity securities from continued low interest rates. Premiums decreased $10 million, or 3%, compared to the prior year period driven by a decrease in sales of immediate annuities with life contingencies, partially offset by an increase in Auto and Home premium growth compared to the prior year period. Other revenues decreased $34 million, or 14%, compared to the prior year period due to a $21 million decrease in other revenues of CIEs and a $27 million gain on an interest rate hedge put in place in anticipation of issuing debt that was reclassified from accumulated other comprehensive income into earnings in the second quarter of 2011, partially offset by higher fees from variable annuity guarantees driven by higher volumes, as well as higher fee rates.

Net revenues decreased $80 million, or 2%, for the six months ended June 30, 2012 compared to the prior year period due to lower investment income from continued low interest rates and volatile equity markets. In addition, the prior year period included a $27 million gain from an interest rate hedge. Management and financial advice fees decreased $25 million, or 1%, for the six months ended June 30, 2012 compared to the prior year period due to lower asset-based fees driven by a decline in average AUM. Average AUM decreased $7.4 billion, or 1%, compared to the prior year period. See our discussion on the changes in AUM in our segment results of operations section below. Distribution fees decreased $15 million, or 2%, for the six months ended June 30, 2012 compared to the prior year period due to lower asset-based fees driven by a decline in average AUM and lower transactional revenues. Net investment income decreased $10 million, or 1%, compared to the prior year period reflecting a decrease in investment income on fixed maturity securities from continued low interest rates, partially offset by a $31 million increase in investment income of CIEs. Other revenues decreased $32 million, or 7%, compared to the prior year period due to a $40 million decrease in other revenues of CIEs and a $27 million gain on an interest rate hedge put in place in anticipation of issuing debt that was reclassified from accumulated other comprehensive income into earnings in the second quarter of 2011, partially offset by higher fees from variable annuity guarantees driven by higher volumes, as well as higher fee rates.

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