The volatile stock market in the fourth quarter produced challenges for Minneapolis-based Ameriprise Financial. But rocky markets also brought more business to its personal financial planning and advice services.
"Ameriprise delivered solid results in a volatile quarter with our Advice and Wealth Management business driving our growth," said Chairman and Chief Executive Jim Cracchiolo, in a statement. "Ameriprise client flows into fee-based investment advisory remained strong and cash balances increased."
The company earned $539 million, up from $177 million in the same period a year ago. Earnings per share were $3.76, up from $1.15. But net revenue was nearly flat at $3.2 billion.
Adjusting for the effect of the federal tax reforms in the fourth quarter of 2017 and other items, Ameriprise's adjusted earnings rose 12 percent to $544 million, or $3.80 per share — a 21 percent increase from adjusted EPS of $3.15 in the fourth quarter last year.
Those results exceeded analysts' expectations in all categories.
Analysts covering the Minneapolis-based financial services company expected the company to report fourth-quarter adjusted EPS of $3.58 per share, on revenue of $3.18 billion.
Clients looking for fee-based investment advisory products contributed $4.5 billion of inflows in the quarter, making it the seventh consecutive quarter of inflows more than $4 billion for the division.
But while there were increases from adviser clients, they were offset by the market depreciation and asset management decreases. Assets under management and administration were $823 billion at the end of the fourth quarter, down from $897 billion in the fourth quarter of 2017.
"Equity market declines globally were clear challenges," Cracchiolo said. "U.S. equity markets declined 14 percent in the quarter, which impacted our average assets and related fees, increased noncash annuity expenses and heightened industrywide asset management outflows."
Analyst John Barnidge from Sandler, O'Neil Partners, was expecting decreases from assets under management based on tracking data from Morningstar released before Ameriprise's fourth-quarter report.
"The poor flow performance in December and 4Q '18 is unsurprising — in our opinion — given the equity markets declined 9.2 percent in December and 14 percent in 4Q '18," Barnidge wrote in a report two weeks ago.
Barnidge maintained a buy rating on Ameriprise.
For the year, Ameriprise's adjusted operating earnings were $2.2 billion, or $14.94 per share, up 20 and 27 percent respectively from 2017.
During 2018, Ameriprise also returned more than $2 billion to shareholders through dividends and the repurchase of 11 million shares.
Results were released after the market closed. Ameriprise shares closed Wednesday at $120.18 per share, down 1 percent.
Patrick Kennedy • 612-673-7926
