Ameriprise Financial, Inc. (NYSE: AMP) fell 1.4% (as of 24 Apr, 1:17 PM GMT-4; Source: Google finance) despite a positive start.
On the other hand, In the first quarter of FY 18, the group has posted better than expected results. The company has reported first quarter 2018 net income growth of 55% to $594 million, compared to a year ago. The company has delivered a strong first quarter, has generated strong earnings across the firm, and the company’s momentum in Advice and Wealth Management continues with double-digit revenue growth, increased client activity and one of the strongest quarters of client net inflows.
AMP in the first quarter of FY 18 has reported the adjusted earnings per share of 15 cents, beating the analysts’ estimates for the adjusted earnings per share of $3.31. The company had reported the adjusted revenue growth of 9 percent to $3.20 billion in the first quarter of FY 18, beating the analysts’ estimates for revenue of $3.08 billion. The revenue grew due to the “strong” sales growth in the company’s advice & wealth management business.
Moreover, the first quarter 2018 profitability was strong, with a 30 percent increase in adjusted operating earnings and a 29.3 percent adjusted operating ROE excluding AOCI, up 570 basis points compared to the prior year.
AMP has returned over 90 percent of adjusted operating earnings to shareholders, which reflects strong balance sheet fundamentals, excellent risk management discipline and substantial free cash flow generation. The company has repurchased 2.4 million shares of common stock for $387 million and paid $125 million in quarterly dividends.
Excess capital increased to $1.4 billion, the RBC ratio increased to over 500 percent and a total of $484 million in dividends were paid from subsidiaries to the holding company during the first quarter 2018.
Additionally, the total assets under management and administration rose 9 percent to $887 billion, due to the ongoing strength in Ameriprise advisor client net inflows. The company’s retail client assets grew 12 percent to $557 billion.
Client demand for fee-based investment advisory (wrap) products is strong with net inflows of $5.7 billion in the first quarter 2018. Wrap assets reached $251 billion, which is one of the largest platforms in the industry.
Advisor productivity had increased a strong 13 percent to $586,000 per advisor on a trailing 12-month basis after normalizing for the net impact from eliminating 12b-1 fees in advisory accounts. Columbia Threadneedle investment performance in retail and institutional equity, fixed income and multi-asset portfolios and strategies remains strong. At the first quarter end, the company had 109 four- and five-star Morningstar-rated funds.
Within its multi-asset solution set, gross sales of the Columbia Adaptive Risk Allocation Fund and the Threadneedle Dynamic Real Return Fund increased to over $600 million in the quarter.
Variable annuity cash sales has risen 20 percent, with 30 percent of sales in products without living benefit guarantees. Indexed Universal Life sales grew 9 percent.
AMP has raised its quarterly dividend by 8% to 90 cents a share