NEW YORK (AP) — Shares of Ameriprise Financial Inc. advanced Thursday after the financial planning company reported revenue growth and a strong cash position in the third quarter.
THE SPARK: The company said net income fell to $271 million, or $1.04 per share, from $346 million, or $1.35 per share a year ago. The decline reflected a charge of $106 million, or 42 cents per share, related to deferred acquisition costs and the company's annual review of insurance and annuity valuations.
Not including one-time items, the company earned $1.12 per share, which was short of Wall Street expectations. Analysts on average expected profit of $1.19 per share, according to FactSet.
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THE BIG PICTURE: Ameriprise said that operating net revenue increased to $2.46 billion, from $2.33 billion a year ago, driven by double-digit growth in management and distribution fees.
The company also noted that it repurchased 9.9 million shares of its common stock for $447 million in the quarter. Even after the repurchases, the company said it maintained more than $2 billion in excess capital.
Ameriprise also said that its total investment portfolio was $41.3 billion and has no holdings of sovereign debt in financially troubled European countries.
THE ANALYSIS: Sterne Agee & Leach analyst John Nadel raised his price target to $60, from $59. He raised his forecast for 2012 and 2013 from $5.91 per share and $6.85 per share, to $6 per share and $6.90 per share.
THE STOCK: Shares of Minneapolis-based Ameriprise rose $5.83, or 13.6 percent, at $48.69.
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