Ameriprise Lifts Profits 44% on Strong Wealth Results

Ameriprise Financial (AMP) said late Wednesday that its second-quarter net income rose 44%, to $322 million, or $1.54 per share, versus $224 million, or $0.99 per diluted share, a year ago. Adjusted earnings were $352 million, or $1.69 per share, compared with $254 million, or $1.13 per share, a year ago.

Operating net revenues grew 9% to $2.75 billion, “primarily driven by robust client net inflows, increased client activity and market appreciation, partially offset by the decline in net investment income from low interest rates,” the company says.

Analysts had expected adjusted earnings to be $1.62 per share and revenue to hit $2.77 billion.

Ameriprise’s operating expenses grew 6% to $2.3 billion, mainly due to higher distribution costs from business growth, though general and administrative expenses remaining flat compared to a year ago.

“Ameriprise delivered another quarter of strong financial results,” said Chairman and CEO Jim Cracchiolo (left), in a statement. “Revenues and earnings were up nicely; in fact, our operating return on equity reached an all-time high of 17.9%.

“All of our business segments performed well, most notably Advice and Wealth Management,” Cracchiolo explained. “We’re experiencing good growth in client acquisition and strong client net inflows, which are key drivers of advisor productivity gains. Even with the pressure of low interest rates, we’re delivering meaningful growth in profitability.”

Wealth Management

Revenue in the Advice & Wealth Management unit grew 6% from last quarter and 13% from the prior year to $1.08 billion. The unit accounts for about 40% of Ameriprise’s total revenue.

Pre-tax earnings for the division hit $152 million, a jump of 16% from the second quarter and an increase of 37% from the year-ago period.