Summary
Ameriprise Financial, Inc. (AMP) reported a significant decrease in net income attributable to Ameriprise Financial for the second quarter and first half of 2009 compared to the same periods in 2008. This decline was primarily driven by the persistent negative impact of weak equity markets on asset-based fees. Total net revenues for the quarter were down 5% and for the first half were down 9%. Despite these revenue challenges, the company saw a notable increase in net investment income, driven by higher income on fixed maturity securities and net realized investment gains, as well as growth in premiums and other revenues, including a gain on debt repurchase. Management highlighted that client preference for guaranteed returns led to increased fixed annuity net inflows and reduced variable annuity net inflows. The company also reported an increase in general and administrative expenses, partly due to acquisition-related costs, but emphasized ongoing expense controls. While facing market headwinds, Ameriprise demonstrated resilience with strong advisor and client retention rates and continued to attract experienced advisors.
Financial Highlights
35 data points| Revenue | $1.91B |
| Operating Expenses | $1.76B |
| Net Income | $95.00M |
| EPS (Basic) | $0.41 |
| EPS (Diluted) | $0.41 |
| Shares Outstanding (Basic) | 228.80M |
| Shares Outstanding (Diluted) | 230.00M |
Key Highlights
- 1Net income attributable to Ameriprise Financial decreased significantly by 55% for Q2 2009 and 44% for the first half of 2009 compared to the prior year periods, largely due to market depreciation.
- 2Total net revenues declined by 5% for Q2 2009 and 9% for the first half of 2009, primarily impacted by lower management and financial advice fees and distribution fees.
- 3Net investment income saw a substantial increase of 31% for Q2 2009 and 18% for the first half of 2009, driven by higher income on fixed maturity securities and net realized investment gains.
- 4The Annuities segment showed a strong increase in pretax income of 22% for Q2 2009 and 87% for the first half of 2009, driven by higher net investment income and favorable interest crediting trends.
- 5General and administrative expenses increased due to acquisition integration costs and higher legal expenses, though offset by expense controls and favorable foreign currency translation.
- 6Ameriprise Financial secured additional liquidity through the issuance of Senior Notes and common stock in June 2009, while temporarily suspending its share repurchase program.
- 7The company maintained strong advisor (91%) and client (94%) retention rates as of June 30, 2009, and continued to attract experienced advisors.