It has been about a month since the last earnings report for Ameriprise Financial Services, Inc. AMP. Shares have lost about 6% in that time frame, underperforming the market.

Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Ameriprise Beats on Q1 Earnings as Revenues Improve

Ameriprise’s first-quarter 2017 operating earnings per share of $2.70 comfortably surpassed the Zacks Consensus Estimate of $2.52. Also, the figure represents a year-over-year increase of 24%.

Results came in better than expected, primarily due to a rise in revenues. Also, growth in assets under management (AUM) and assets under administration (AUA) were on the positive side. However, higher expenses hurt the results to some extent.

After considering several significant items, net income for the reported quarter came in at $403 million or $2.52 per share, up from $364 million or $2.09 per share in the prior-year quarter.

Revenue Growth Offsets Increase in Costs

Net revenue (on a GAAP basis) was $2.90 billion, up 5% from the year-ago quarter. However, the figure was in-line with the Zacks Consensus Estimate.

On an operating basis, total net revenue came in at $2.86 billion, up 3% from the prior-year quarter. This reflected strong net revenue growth in Advice & Wealth Management segment.

Operating expenses came in at $2.34 billion, 2% higher than the prior-year quarter. The increase was primarily due to a rise in general and administrative expense.

Strong AUM & AUA

As of Mar 31, 2017, total AUM and AUA was $817.59 billion, up 6% year over year. Net outflows from Asset Management segment and the unfavorable impact of foreign exchange rates were more than offset by Ameriprise’s advisor client net inflows and market appreciation.

Share Repurchases Update

In the reported quarter, Ameriprise repurchased 2.9 million shares for $357 million. Additionally, the Board of Directors authorized an additional share repurchase of $2.5 billion, which expires on Jun 30, 2019.

Outlook

Ameriprise expects additional interest revenue growth in second-quarter 2017 attributable to the interest rate hike in March.

Management expects DOL expenses to decline sequentially in the second quarter.

Management expects margin expansion in the AWM segment to continue over time, assuming no significant market disruptions will take place. Also, margins in the AM segment are anticipated to improve to a range of 35–39%, as the company enters more normalized markets.

The expense ratio on protection for Auto and Home is projected to be in mid-18% for 2017.

The company anticipates effective operating tax rate to be 22–24% in 2017.

Management expects to continue returning 90–100% of operating earnings to its shareholders in 2017.

How Have Estimates Been Moving Since Then?

Following the release, investors have witnessed a downward trend for fresh estimates. There has been one revision higher for the current quarter compared to two lower.

AMERIPRISE FINANCIAL SERVICES, INC. Price and Consensus

AMERIPRISE FINANCIAL SERVICES, INC. Price and Consensus | AMERIPRISE FINANCIAL SERVICES, INC. Quote

VGM Scores

At this time, the stock has a poor Growth Score of 'F', however its momentum is doing a lot better with an 'A'. Charting a somewhat similar path, the stock was allocated a grade of 'B' on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of 'C'. If you aren't focused on one strategy, this score is the one you should be interested in.

Our style scores indicate that the stock is more suitable for momentum investors than value investors.

Outlook

Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift.  Notably, the stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Click for Free AMERIPRISE FINANCIAL SERVICES, INC. (AMP) Stock Analysis Report >>
 
To read this article on Zacks.com click here.
 
Zacks Investment Research