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TD Bank (TD) Falls 2.5% Despite Y/Y Increase in Q4 Earnings
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The Toronto-Dominion Bank (TD - Free Report) announced fourth-quarter (ended Oct 31) and fiscal 2017 results on Thursday, before the opening bell. Adjusted earnings for the quarter came in at C$1.36 per share, up 11.5% year over year. Also, adjusted net income rose 10.9% year over year to C$2.6 billion ($2.08 billion). However, investors do not seem very satisfied with the results. Consequently, the stock lost 2.5%.
Improvement in revenues was partially offset by higher provisions. Also, growth in capital and profitability ratios was impressive.
After considering certain non-recurring items, net income for the fourth quarter was C$2.7 billion ($2.16 billion), up 17.8% year over year.
Revenues & Provisions Increase, Expenses Decline
Total revenues (on an adjusted basis) for the reported quarter amounted to C$9.07 billion ($7.26 billion), up 3.9% year over year. The rise was attributable to growth in net interest income as well as non-interest income.
Adjusted net interest income for the quarter rose 5.1% year over year to C$5.33 billion ($4.26 billion). Also, adjusted non-interest income came in at C$3.74 billion ($2.99 billion), up 2.5% year over year.
Adjusted non-interest expenses decreased 1% year over year to C$4.74 billion ($3.79 billion). Adjusted efficiency ratio was 52.3% at the quarter end, down from 54.8% as of Oct 31, 2016. A decline in efficiency ratio indicates an improvement in profitability.
Total provision for credit losses rose 5.5% year over year to C$578 million ($462.4 million).
Profitability and Capital Ratios Improve
Return on common equity, on an adjusted basis, came in at 14.7%, slightly up from 13.6% as of Oct 31, 2016.
As of Oct 31, 2017, common equity Tier I capital ratio came in at 10.7%, up from 10.4% in the prior-year quarter. Total capital ratio came in at 14.9% for the reported quarter, down from 15.2% as of Oct 31, 2016.
Our Viewpoint
TD Bank’s efforts toward improving revenues, both organically and inorganically, are supported by its strong capital position. Though elevated level of provisions remains a concern, the export-driven economy of Canada is likely to benefit from gradual recovery of the U.S. economy. This, in turn, might aid the Zacks Rank #4 (Sell) company’s growth over the long run.
Toronto Dominion Bank (The) Price, Consensus and EPS Surprise
Royal Bank of Canada (RY - Free Report) reported fourth-quarter fiscal 2017 (ended Oct 31) net income of C$2.8 billion ($2.2 billion), up 12% from the prior-year quarter.
The Bank of Nova Scotia (BNS - Free Report) reported fourth-quarter fiscal 2017 (ended Oct 31) results before the opening bell. Net income for the quarter came in at C$2.1 billion ($1.7 billion), jumping 3% year over year.
Barclays PLC’s (BCS - Free Report) third-quarter 2017 net income attributable to ordinary equity holders was £583 million ($763.1 million), reflecting a significant improvement from £190 million in the prior-year quarter.
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
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TD Bank (TD) Falls 2.5% Despite Y/Y Increase in Q4 Earnings
The Toronto-Dominion Bank (TD - Free Report) announced fourth-quarter (ended Oct 31) and fiscal 2017 results on Thursday, before the opening bell. Adjusted earnings for the quarter came in at C$1.36 per share, up 11.5% year over year. Also, adjusted net income rose 10.9% year over year to C$2.6 billion ($2.08 billion). However, investors do not seem very satisfied with the results. Consequently, the stock lost 2.5%.
Improvement in revenues was partially offset by higher provisions. Also, growth in capital and profitability ratios was impressive.
After considering certain non-recurring items, net income for the fourth quarter was C$2.7 billion ($2.16 billion), up 17.8% year over year.
Revenues & Provisions Increase, Expenses Decline
Total revenues (on an adjusted basis) for the reported quarter amounted to C$9.07 billion ($7.26 billion), up 3.9% year over year. The rise was attributable to growth in net interest income as well as non-interest income.
Adjusted net interest income for the quarter rose 5.1% year over year to C$5.33 billion ($4.26 billion). Also, adjusted non-interest income came in at C$3.74 billion ($2.99 billion), up 2.5% year over year.
Adjusted non-interest expenses decreased 1% year over year to C$4.74 billion ($3.79 billion). Adjusted efficiency ratio was 52.3% at the quarter end, down from 54.8% as of Oct 31, 2016. A decline in efficiency ratio indicates an improvement in profitability.
Total provision for credit losses rose 5.5% year over year to C$578 million ($462.4 million).
Profitability and Capital Ratios Improve
Return on common equity, on an adjusted basis, came in at 14.7%, slightly up from 13.6% as of Oct 31, 2016.
As of Oct 31, 2017, common equity Tier I capital ratio came in at 10.7%, up from 10.4% in the prior-year quarter. Total capital ratio came in at 14.9% for the reported quarter, down from 15.2% as of Oct 31, 2016.
Our Viewpoint
TD Bank’s efforts toward improving revenues, both organically and inorganically, are supported by its strong capital position. Though elevated level of provisions remains a concern, the export-driven economy of Canada is likely to benefit from gradual recovery of the U.S. economy. This, in turn, might aid the Zacks Rank #4 (Sell) company’s growth over the long run.
Toronto Dominion Bank (The) Price, Consensus and EPS Surprise
Toronto Dominion Bank (The) Price, Consensus and EPS Surprise | Toronto Dominion Bank (The) Quote
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Foreign Banks
Royal Bank of Canada (RY - Free Report) reported fourth-quarter fiscal 2017 (ended Oct 31) net income of C$2.8 billion ($2.2 billion), up 12% from the prior-year quarter.
The Bank of Nova Scotia (BNS - Free Report) reported fourth-quarter fiscal 2017 (ended Oct 31) results before the opening bell. Net income for the quarter came in at C$2.1 billion ($1.7 billion), jumping 3% year over year.
Barclays PLC’s (BCS - Free Report) third-quarter 2017 net income attributable to ordinary equity holders was £583 million ($763.1 million), reflecting a significant improvement from £190 million in the prior-year quarter.
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
Click here to see the 5 stocks >>