Ameriprise Earnings: Solid Results and Well Positioned to Manage Medium-Term Interest Rate Headwinds

Ameriprise Financial reported net income to common shareholders of $583 million, or $5.83 per diluted share, on $4.4 billion of net revenue for the first quarter. On a company-provided adjusted operating basis, which excludes the effects of changes in interest rates on some of its products, Ameriprise reported pro forma operating earnings per share of $9.50, up 13% from the previous year. Net revenue increased 5% from a year ago and decreased 3% sequentially, driven by slower equity market appreciations and continued impact from lower interest rates since September. Ameriprise increased its quarterly dividend by 8% to $1.60, and total capital return to shareholders was 81% of adjusted operating earnings. We don’t anticipate making a material change to our $504 fair value estimate for narrow-moat Ameriprise. Shares are fairly valued at the current price.