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On Jan. 28, 2009,

Ameriprise Financial

(AMP) - Get Report

swung to a net loss in Q4 FY08 as expenses increased amid falling revenue. Net loss was $369.00 million or $1.69 per share compared to a net income of $255.00 million or $1.08 per share in Q4 FY07. Core operating earnings declined to $176.00 million or $0.80 per share from $262.00 million or $1.11 per share a year ago. The latest quarterly earnings beat the consensus estimate of $0.27 per share.

Net revenue decreased 40.3% to $1.35 billion, hurt by deteriorating economic conditions. Management and financial advice fees dipped 34.7% to $607.00 million, due to the disruptions in equity market. Distribution fees plunged 19.5% to $334.00 million, on lower client activity and lower asset levels. Net investment loss totaled $28.00 million against a profit of $475.00 million a year earlier, hurt by net realized investment losses of $420.00 million.

Other revenue slipped 11.4% to $202.00 million, as the prior-year quarter had benefitted from unwinding of a variable interest entity and sale of the recordkeeping business. However, premium revenue was up 4.1% to $282.00 million, supported by a growth in Auto & Home premiums. Segment-wise, net revenue from Advice & Wealth Management diminished 38.5% to $582.00 million, and the Assets Management revenue plunged 46.1% to $265.00 million. Revenue from the Annuities and Protection segments dropped 46.6% and 12.0% to $310.00 million and $461.00 million, respectively.

Total expenses rose 3.6% to $1.99 billion, due to increased benefits, claims, losses and settlement expenses, and higher amortization of deferred acquisition costs. Benefits, claims, losses and settlement expenses jumped 19.9% to $331.00 million, while amortization of deferred acquisition costs more than doubled to $395.00 million from $164.00 million a year ago.

During FY08, AMP's total net revenue fell 18.5% to $6.97 billion from $8.56 billion in FY07. Consequently, the company swung to a loss of $38.00 million or $0.17 per share from a profit of $814.00 million or $3.39 per share in the previous year.

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