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Investing.com -- Ameriprise Financial, Inc. (NYSE:AMP) reported second-quarter adjusted earnings that exceeded Wall Street expectations, but shares tumbled 5% as investors focused on a significant decline in client net flows.
The financial services company posted adjusted earnings per share of $9.11 for the second quarter, surpassing analyst estimates of $8.95. Revenue came in at $4.37 billion, slightly above the consensus estimate of $4.34 billion and up 4% YoY. Despite the earnings beat, the company reported a 35% decline in quarterly net flows, which appears to be driving the negative market reaction.
Total (EPA:TTEF) client assets reached a record high of $1.1 trillion, up 11% from the previous year, while assets under management, administration and advisement hit $1.6 trillion, representing a 9% increase. However, total client net flows fell to $4.3 billion from $6.6 billion a year ago, a 35% decrease. Wrap net flows declined 28% to $5.4 billion.
"Ameriprise delivered another good quarter, posting strong financial results," said Jim Cracchiolo, Chairman and Chief Executive Officer. "While markets were volatile in the quarter, client activity remained strong. And advisor productivity grew by double digits, reaching another record."
The company’s Advice & Wealth Management segment generated pretax adjusted operating earnings of $812 million with a margin of 29%, down from 31.1% in the same quarter last year. The Asset Management segment saw a 2% increase in pretax adjusted operating earnings to $222 million, with net pretax adjusted operating margin improving to 39%.
Ameriprise returned $731 million to shareholders during the quarter through dividends and share repurchases, representing 81% of adjusted operating earnings. The company maintained a strong adjusted operating return on equity of 51.5%, up from 48.9% a year ago.
Market volatility and seasonal tax payment trends impacted the company’s metrics during the quarter, though management noted the equity market recovery in June positions the company well entering the third quarter.
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