Ameriprise Financial Inc. (AMP) has seen revenue rise as the financial markets have rallied. The company has surprised on estimates 3 out of 4 quarters by an average of 50.73%. Ameriprise is trading with a forward P/E of 14.25.
Company Description
Ameriprise Financial manages a network of 10,000 financial advisors. The company also provides asset management and insurance. It specializes in retirement planning for the affluent.
Ameriprise Financial Surprised by 63.49% in the Third Quarter
On Oct 21, Ameriprise reported third quarter results that easily beat the Zacks Consensus Estimate. Earnings per share were $1.03 compared with the consensus of 63 cents. EPS was a loss of 32 cents in the year ago period.
Revenue rose 20% to $2 billion from $1.6 billion a year ago. The growth is mainly due to the year-over-year improvement in net investment income, primarily because of net investment losses in the prior year.
The company is seeing slow improvement in its business fundamentals with new client growth and improved asset levels. It also expects contributions from its pending acquisition of Columbia Management’s long-term asset management business.
Zacks Consensus Estimates Rise
Given the better than expected third quarter results, analysts moved to quickly raise estimates for the rest of 2009.
The fourth quarter Zacks Consensus Estimate rose 5 cents to 73 cents in the last 30 days with 6 analysts raising and 3 lowering out of 9 analysts in that time period.
For the full year, the Zacks Consensus jumped 17.5% to $2.69 from $2.29 per share in the prior month. 6 out of 7 analysts raised estimates during that time. 2010 estimates are also higher, rising 23 cents to $3.52 from $3.29 per share. That’s an increase in earnings of 30.74% over 2009.
Value Fundamentals
Ameriprise Financial is a Zacks #1 Rank (strong buy) stock. It is trading with a price-to-book of 1.17. The company has a solid 5-year return on equity (ROE) of 11.51%.
