Ameriprise Financial, Inc. AMP is scheduled to report second-quarter 2021 results on Jul 26, after market close. Its revenues and earnings are anticipated to have witnessed a rise in the quarter on a year-over-year basis.

In the last reported quarter, the company’s earnings surpassed the Zacks Consensus Estimate. Higher revenues along with an improvement in assets under management (AUM) and assets under administration (AUA) balance supported results. However, a rise in expenses was a headwind.

Ameriprise has a decent earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in three and lagged in one of the trailing four quarters, the average beat being 3.9%.

The Zacks Consensus Estimate for the company’s second-quarter earnings is pegged at $5.23 per share, which indicates a rise of 98.1% from the prior-year quarter’s reported number. The estimate has been revised marginally upward over the past seven days.

The consensus estimate for total sales is pegged at $3.38 billion, which indicates a 22.1% rise from the year-ago quarter’s reported figure.

Estimates & Key Factors to Note for 2Q21

The Zacks Consensus Estimate for management and financial advice fees (constituting more than 60% of the company’s total net revenues) is pegged at $2.18 billion, which suggests a rise of 3.6% from the prior quarter’s reported number.

The consensus estimate for distribution fees of $503 million indicates a rise of 9.8% sequentially. The consensus estimate for premiums, policy and contract charges is pegged at $357 million, indicating a 2.9% sequential rise.

However, the consensus estimate for net investment income of $278 million suggests a decline of 26.3% from the previous quarter’s reported figure. Likewise, the consensus mark for other revenues of $69 million indicates a 2.8% sequential decline.

The company’s Asset Management segment has recorded net outflows over the past few years, which negatively impacted asset growth. However, last year and in the first quarter of 2021, the segment recorded overall net inflows. Given the expectation of a similar trend in the to-be-reported quarter, the segment’s asset balances are likely to have been positively impacted.

Likewise, based on expectations of improved advisor productivity, the Advice & Wealth Management segment is expected to have recorded growth in assets in the second quarter.

While Ameriprise’s initiatives to focus on cost management have resulted in controlled general and administration expenses in the past, overall costs are anticipated to have been elevated in the to-be-reported quarter due to costs related to technology upgrades.

Key Development during the Quarter

In April, Ameriprise announced a definitive agreement with Canada-based BMO Financial Group to take over its EMEA asset management operations for roughly $845 million. The move was taken to further strengthen the wealth and asset management businesses. The all-cash deal is expected to close in the fourth quarter of 2021.

The acquisition is projected to be accretive in 2023, with an internal rate of return of 20%. Also, the deal is likely to boost Columbia Threadneedle’s AUM to $671 billion. It will complement Columbia Threadneedle’s core business and global growth strategy.

Earnings Whispers

According to our quantitative model, the chances of Ameriprise beating the Zacks Consensus Estimate this time are high. This is because it has the right combination of the two key ingredients — a positive Earnings ESP and Zacks Rank #3 (Hold) or better, which is required to be confident of an earnings beat.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: Ameriprise has an Earnings ESP of +1.31%.

Zacks Rank: The company currently carries a Zacks Rank #2 (Buy).

Other Stocks to Consider

Here are a few other finance stocks that you may want to consider, as according to our model, these too have the right combination of elements to post an earnings beat in their upcoming releases.

Regions Financial RF is slated to report quarterly results on Jul 23. The company currently has an Earnings ESP of +1.96% and a Zacks Rank of 3.

The Earnings ESP for Prosperity Bancshares PB is +1.52% and it carries a Zacks Rank #2 at present. The company is slated to report quarterly numbers on Jul 28. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

T. Rowe Price Group TROW is scheduled to release earnings on Jul 29. The company, which carries a Zacks Rank #3 at present, has an Earnings ESP of +1.34%.

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