Tags: Ameriprise | advisers | sell | AMP

Ameriprise Financial Up as Advisers Sell More

By    |   Thursday, 20 Oct 2011 01:51 PM

Financial planning services company Ameriprise Financial (AMP) provides comprehensive financial planning through a network of employee and franchise financial advisors. For the first half of 2011 the company posted much improved results compared to the previous year as advisers sell more products.

Ameriprise Financial generates revenues through financial planning fees, plus the company's financial advisors sell Ameriprise products to clients. Revenue sources are divided into Advice & Wealth Management, Asset Management, Annuities, and Protection (insurance). All four streams of revenue produce operating income for the company.

For the first two quarters of 2011 operating net income per share were $1.35 and $1.31 respectively, up from 85 cents and 97 cents in the same periods of 2010. For the full 2011 fiscal year Ameriprise is forecast to earn $5.33 per share, compared to $4.47 in 2010.

The current consensus estimate for 2012 earnings is $6.23 per share. With the first quarter earnings announcement, the quarterly dividend was increased 28 percent to 23 cents per share.

Legal issues

In the first quarter, Ameriprise took a $77 million, 30 cents per share charge for legal problems stemming from the company’s captive securities broker-dealer, Securities America Financial. In August, the company announced the sale of the broker-dealer to Ladenburg Thalmann Financial Service (LTS) for $150 million. Securities America had cost Ameriprise Financial almost $120 million in a class-action suit in the first half of 2011.

Revenue and earnings growth for Ameriprise comes from increased productivity of the company's financial advisors. In the second quarter, revenues per advisor increase by 14 percent as the number of advisors increased slightly. Ameriprise employs or franchises more than 10,000 advisors to work with the company's customer base.

The most recent analyst comment on AMP was a reiterated overweight recommendation from the analysts at Barclays Capital. Citigroup analysts recently lowered their target price for the stock and reduced their forecast earnings for both 2011 and 2012.

The company next reports on Oct. 26.

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Financial planning services company Ameriprise Financial (AMP) provides comprehensive financial planning through a network of employee and franchise financial advisors. For the first half of 2011 the company posted much improved results compared to the previous year as...
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Thursday, 20 Oct 2011 01:51 PM
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