Ameriprise Financial (AMP) reported a second-quarter 2014 net income of $374 million, or $1.91 per diluted share, up 24% from a year ago but falling short of analyst estimates of $2 per share. Operating net revenues were up 6% year-over-year with a reported $2.9 billion in Q2.
“Ameriprise delivered another quarter of strong financial results with particular strength in our Advice and Wealth Management business,” said Jim Cracchiolo, chairman and chief executive officer, in a press release. “As we serve our clients and advisors, we continue to generate good revenue and earnings growth and posted another record high operating return on equity, ending the quarter at nearly 22%.”
Combined, the company reported that Advice & Wealth Management and Asset Management generated more than 60% of company pretax operating earnings.
Pretax operating earnings for Advice & Wealth Management increased 29% year-over-year to $194 million in second-quarter 2014, which according to the report reflected “robust revenue growth and expense controls.”
Average annualized fees and commissions per advisor stood at $468,000, a jump of 14% from last year’s $411,000, which was driven by client net inflows, client acquisition and market appreciation, the company said. Mutual fund wrap flows for the wealth group were $3 billion vs. $3.1 billion a year ago, a 3% decline.
The second-quarter 2014 pretax operating margin reached a record high of 16.2% compared with 13.9% a year ago.
The Asset Management group reported pretax operating earnings of $199 million in the quarter, a 3% increase from a year ago. Excluding the gain from the sale of the Cofunds investment platform in the prior-year period, operating earnings increased 21% driven by “market appreciation and continued expense management, partially offset by the impact of net outflows in prior periods,” according to the report. For the quarter, the group’s net inflows were $4.4 billion, compared with net outflows of $2.1 billion a year ago.
In the quarter, the company returned $464 million to shareholders through share repurchases and dividends. The company returned $921 million to shareholders through the first two quarters of the year.
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