On July 24, 2024, Ameriprise Financial Inc (AMP, Financial) released its 8-K filing for the second quarter of 2024. Ameriprise Financial is a major player in the U.S. market for asset and wealth management, with around $1.4 trillion in total assets under management and administration at the end of 2023. With about 10,000 advisors, Ameriprise has one of the largest branded advisor networks in the industry. About 80% of the company's revenue comes from its asset and wealth management segments. Ameriprise has reduced its exposure to insurance with the sale of its auto and home insurance business in 2019 and the exit of the sale of its proprietary fixed annuities in 2020.
Performance Overview
Ameriprise Financial Inc (AMP, Financial) reported GAAP earnings per diluted share of $8.02 for Q2 2024, slightly below the $8.21 reported in the same quarter last year. Adjusted operating earnings per diluted share were $8.53, surpassing the analyst estimate of $8.34. Excluding severance expenses, adjusted operating EPS grew 17% to $8.72. The company’s GAAP net income for the quarter was $829 million, a 7% decrease from $890 million in Q2 2023.
Key Financial Achievements
Ameriprise Financial Inc (AMP, Financial) achieved significant milestones in Q2 2024:
- Assets under management and administration reached $1.4 trillion, up 12% from strong client net inflows and market appreciation.
- Adjusted operating net revenues increased 9% from organic growth, strong equity markets, and higher spread revenues.
- General and administrative expenses were flat compared to a year ago, demonstrating continued focus on operational efficiency and effectiveness.
- The company returned $693 million of capital to shareholders, showcasing its balance sheet strength and strong free cash flow generation.
Income Statement Highlights
| Metric | Q2 2024 | Q2 2023 | % Change |
|---|---|---|---|
| GAAP Net Income (in millions) | $829 | $890 | (7)% |
| Adjusted Operating Earnings (in millions) | $882 | $807 | 9% |
| GAAP EPS | $8.02 | $8.21 | (2)% |
| Adjusted Operating EPS | $8.53 | $7.44 | 15% |
Segment Performance
The Advice & Wealth Management segment continued to demonstrate consistent profitable organic growth with pretax adjusted operating earnings reaching a new high of $822 million. Adjusted operating net revenues increased 13% to $2.6 billion, driven by growth in client assets, increased transactional activity, and 11% growth in bank net investment income. Total client assets grew 17% to $972 billion, with wrap assets up 18% to $535 billion.
Asset Management adjusted operating net revenues grew 5% to $848 million, and pretax adjusted operating earnings increased 35% to $218 million. Financial results reflected equity market appreciation and the positive impact from expense management actions, which more than offset the cumulative impact of net outflows.
Retirement & Protection Solutions pretax adjusted operating earnings increased 4% to $196 million, reflecting the benefit of stronger interest earnings and higher equity markets, partially offset by higher distribution expenses associated with continued strong sales levels.
Commentary from Leadership
"Ameriprise delivered another good quarter and a strong first half of the year. Our financial results were excellent, reflecting robust revenue growth, ongoing expense discipline, and effective capital management. Client activity and flows into fee-based investment advisory accounts were up nicely as clients begin to put money back to work. Ameriprise has a powerful and differentiated financial foundation. Our business generates significant free cash flow that we consistently invest in our capabilities, solutions, and people and return to shareholders." - Jim Cracchiolo, Chairman and Chief Executive Officer
Analysis
Ameriprise Financial Inc (AMP, Financial) has shown resilience and robust performance in Q2 2024 despite market challenges. The company's ability to maintain strong revenue growth and operational efficiency is commendable. The increase in assets under management and administration, along with the significant capital returned to shareholders, underscores the company's strong financial position. However, the slight decline in GAAP net income and the impact of market fluctuations on derivatives valuation highlight the challenges faced in the current economic environment.
Overall, Ameriprise Financial Inc (AMP, Financial) continues to demonstrate its strength in asset and wealth management, positioning itself well for future growth and stability.
Explore the complete 8-K earnings release (here) from Ameriprise Financial Inc for further details.
