Online brokerage TD Ameritrade Holding Corp. (AMTD) on Wednesday reported a 10 percent increase in profit for the first quarter from last year, reflecting strong trading and growth in asset-based revenues. However, both revenue and earnings per share for the quarter missed analysts' expectations.
Fred Tomczyk, president and CEO of TD Ameritrade said, "We continue to see strong asset gathering in both the retail and institutional channels. Trading was at strong levels due to market volatility and investors continue to increase their usage of options, futures and mobile technology."
At the end of the first quarter, TD Ameritrade had about $672 billion in total client assets, up 13 percent from $596.5 billion reported in the same period last year. Of the total client assets, interest rate sensitive assets accounted for $101 billion, up 4 percent year-over-year.
Net new client assets at the end of the quarter were $18.8 billion, up 30 percent from $14.5 billion at the end of the year-ago quarter. Net new assets grew at an annualized rate of 11 percent in the quarter.
TD Ameritrade's net income for the first quarter rose to $211 million or $0.39 per share from $192 million or $0.35 per share in the year-ago period. On average, 19 analysts polled by Thomson Reuters expected the company to report earnings of $0.40 per share for the quarter. Analysts' estimates typically exclude special items.
Net revenues for the quarter grew 9 percent to $819 million from $752 million in the same period last year, reflecting strong trading and asset-based revenues. Analysts were looking for revenue of $832.22 million.
The company noted that 55 percent of net revenues were asset-based. Commissions and transaction fees increased 9 percent from the year-ago quarter to $359 million, while total asset-based revenues increased 11 percent to $451 million.
Average client trades per day during the quarter was 457,243, up 11 percent from the year-ago period. Activity rate for the quarter was 7.2 percent, compared to 6.9 percent in the same period last year.
The company declared a $0.15 per share quarterly cash dividend, payable on February 18, 2015 to shareholders on record February 4.
Separately, Canadian lender TD Bank Group (TD,TD.TO) said it expects TD Ameritrade's first-quarter earnings to translate into a contribution of about C$90 million to the first quarter net income for the bank, which will be reported under International Financial Reporting Standards.
TD Bank Group will release its first-quarter financial results on February 26, 2015.
AMTD closed Tuesday's trading at $33.12. In Wednesday's pre-market activity, the stock is up $0.06 or 0.18 percent to $33.18.
For comments and feedback contact: editorial@rttnews.com
Business News