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TD Ameritrade Holding Corporation (AMTD - Free Report) recorded a positive earnings surprise of 4.5% in fourth-quarter fiscal 2018 (ending Sep 30). The company reported earnings of 92 cents per share, significantly beating the Zacks Consensus Estimate of 88 cents. Moreover, the figure soared 88% from the prior-year quarter.
The company’s results displayed stellar revenues and elevated expenses in the fiscal fourth quarter. Rise in net interest margin (NIM) was also recorded. Notably, the company witnessed an increase in average client trades per day, indicating improvement in trading activity.
Including certain non-recurring items, net income for the quarter came in at $454 million or 80 cents per share compared with $211 million or 39 cents reported in the prior-year quarter.
For fiscal 2018, adjusted net income came in at $1.9 billion or $3.34 per share compared with $976 million or $1.84 recorded in fiscal 2017. Including certain non-recurring items, net income came in at $1.5 billion or $2.59 per share compared with $872 million or $1.64 reported in fiscal 2017.
Rise in Revenues Offset Escalating Expenses
For fiscal 2018, the company reported revenues of $5.5 billion, up 48.6% year over year. Furthermore, the revenue figure surpassed the Zacks Consensus Estimate of $5.4 billion.
Net revenues for the reported quarter came in at $1.4 billion, surpassing the Zacks Consensus Estimate of $1.39 billion. Also, the reported figure surged 42.2% year over year. The rise chiefly stemmed from higher transaction-based, as well as asset-based revenues.
Total asset-based revenues for the Sep-end quarter amounted to $890 million, up 40.8% year over year, driven by higher bank deposit account fees, as well as investment product fees and net interest revenues.
Commissions and transaction fees climbed 57% from the prior-year quarter to $482 million. Further, the quarter's NIM came in at 2.05%, expanding 39 basis points year over year.
Total operating expenses flared up 22.7% year over year to $763 million. The upswing mainly resulted from rise in a number of expenses, including employee compensation and benefits, advertising, occupancy and equipment costs, and other expenses.
Trading Activity Improves
Average client trades per day for the fiscal fourth quarter jumped 50% year over year to 795,104. For fiscal 2018, average client trades per day were 811,000, up 59% year over year.
As of Sep 30, 2018, net new client assets totaled $24 billion, up 8% year over year. Total client assets came in at $1.3 trillion, up 18.2% year over year.
Average spread-based balance was $142.7 billion, climbing 17.3% year over year, and average fee-based investment balance was up 35.9%, to $271.6 billion.
Balance Sheet Position
As of Sep 30, 2018, TD Ameritrade’s cash and cash equivalents were $2.7 billion compared with $1.5 billion reported as of Sep 30, 2017. Shareholders’ equity was $8 billion compared with $7.2 billion as of Sep 30, 2017.
Our Viewpoint
The company delivered an impressive performance on a significant improvement in trading activities. Furthermore, eased margin pressure in the Jul-Sep quarter acted as a tailwind. The company recorded a rise in average client trades per day. Additionally, the Scottrade acquisition and strong investor engagement supported earnings growth.
Though we remain cautious of elevated costs, which are likely to weigh on the company’s financials, TD Ameritrade’s steady capital-deployment activities and revenue growth are encouraging.
TD Ameritrade Holding Corporation Price, Consensus and EPS Surprise
Charles Schwab’s (SCHW - Free Report) third-quarter 2018 earnings of 65 cents per share beat the Zacks Consensus Estimate by a penny. Also, earnings surged 55% from the prior-year quarter. Revenue growth (driven by a rise in interest income and trading revenues) and absence of fee waivers drove the results. The quarter also witnessed an impressive rise in total client assets and new brokerage accounts. However, higher expenses remained a concern.
Interactive Brokers Group, Inc.’s (IBKR - Free Report) third-quarter earnings per share of 51 cents surpassed the Zacks Consensus Estimate of 49 cents. In addition, the figure came in higher than the prior-year quarter’s earnings of 43 cents per share. Results benefited from an improvement in revenues and rise in DARTs. Further, the Electronic Brokerage segment continued to perform decently. Nonetheless, higher expenses were a headwind.
E*TRADE Financial delivered a positive earnings surprise of 20.5% in third-quarter 2018. Earnings of $1.00 per share comfortably surpassed the Zacks Consensus Estimate of 83 cents. Moreover, the results, including certain one-time items, compared favorably with 49 cents recorded in the prior-year quarter. The results reflected improved net revenues, controlled expenses and a benefit to provision for loan losses. DARTs increased on a year-over-year basis. The quarter also registered a rise in customer accounts and reduced delinquencies.
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TD Ameritrade (AMTD) Q4 Earnings Top, Trading Metrics Improve
TD Ameritrade Holding Corporation (AMTD - Free Report) recorded a positive earnings surprise of 4.5% in fourth-quarter fiscal 2018 (ending Sep 30). The company reported earnings of 92 cents per share, significantly beating the Zacks Consensus Estimate of 88 cents. Moreover, the figure soared 88% from the prior-year quarter.
The company’s results displayed stellar revenues and elevated expenses in the fiscal fourth quarter. Rise in net interest margin (NIM) was also recorded. Notably, the company witnessed an increase in average client trades per day, indicating improvement in trading activity.
Including certain non-recurring items, net income for the quarter came in at $454 million or 80 cents per share compared with $211 million or 39 cents reported in the prior-year quarter.
For fiscal 2018, adjusted net income came in at $1.9 billion or $3.34 per share compared with $976 million or $1.84 recorded in fiscal 2017. Including certain non-recurring items, net income came in at $1.5 billion or $2.59 per share compared with $872 million or $1.64 reported in fiscal 2017.
Rise in Revenues Offset Escalating Expenses
For fiscal 2018, the company reported revenues of $5.5 billion, up 48.6% year over year. Furthermore, the revenue figure surpassed the Zacks Consensus Estimate of $5.4 billion.
Net revenues for the reported quarter came in at $1.4 billion, surpassing the Zacks Consensus Estimate of $1.39 billion. Also, the reported figure surged 42.2% year over year. The rise chiefly stemmed from higher transaction-based, as well as asset-based revenues.
Total asset-based revenues for the Sep-end quarter amounted to $890 million, up 40.8% year over year, driven by higher bank deposit account fees, as well as investment product fees and net interest revenues.
Commissions and transaction fees climbed 57% from the prior-year quarter to $482 million. Further, the quarter's NIM came in at 2.05%, expanding 39 basis points year over year.
Total operating expenses flared up 22.7% year over year to $763 million. The upswing mainly resulted from rise in a number of expenses, including employee compensation and benefits, advertising, occupancy and equipment costs, and other expenses.
Trading Activity Improves
Average client trades per day for the fiscal fourth quarter jumped 50% year over year to 795,104. For fiscal 2018, average client trades per day were 811,000, up 59% year over year.
As of Sep 30, 2018, net new client assets totaled $24 billion, up 8% year over year. Total client assets came in at $1.3 trillion, up 18.2% year over year.
Average spread-based balance was $142.7 billion, climbing 17.3% year over year, and average fee-based investment balance was up 35.9%, to $271.6 billion.
Balance Sheet Position
As of Sep 30, 2018, TD Ameritrade’s cash and cash equivalents were $2.7 billion compared with $1.5 billion reported as of Sep 30, 2017. Shareholders’ equity was $8 billion compared with $7.2 billion as of Sep 30, 2017.
Our Viewpoint
The company delivered an impressive performance on a significant improvement in trading activities. Furthermore, eased margin pressure in the Jul-Sep quarter acted as a tailwind. The company recorded a rise in average client trades per day. Additionally, the Scottrade acquisition and strong investor engagement supported earnings growth.
Though we remain cautious of elevated costs, which are likely to weigh on the company’s financials, TD Ameritrade’s steady capital-deployment activities and revenue growth are encouraging.
TD Ameritrade Holding Corporation Price, Consensus and EPS Surprise
TD Ameritrade Holding Corporation Price, Consensus and EPS Surprise | TD Ameritrade Holding Corporation Quote
Currently, TD Ameritrade carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Investment Brokers
Charles Schwab’s (SCHW - Free Report) third-quarter 2018 earnings of 65 cents per share beat the Zacks Consensus Estimate by a penny. Also, earnings surged 55% from the prior-year quarter. Revenue growth (driven by a rise in interest income and trading revenues) and absence of fee waivers drove the results. The quarter also witnessed an impressive rise in total client assets and new brokerage accounts. However, higher expenses remained a concern.
Interactive Brokers Group, Inc.’s (IBKR - Free Report) third-quarter earnings per share of 51 cents surpassed the Zacks Consensus Estimate of 49 cents. In addition, the figure came in higher than the prior-year quarter’s earnings of 43 cents per share. Results benefited from an improvement in revenues and rise in DARTs. Further, the Electronic Brokerage segment continued to perform decently. Nonetheless, higher expenses were a headwind.
E*TRADE Financial delivered a positive earnings surprise of 20.5% in third-quarter 2018. Earnings of $1.00 per share comfortably surpassed the Zacks Consensus Estimate of 83 cents. Moreover, the results, including certain one-time items, compared favorably with 49 cents recorded in the prior-year quarter. The results reflected improved net revenues, controlled expenses and a benefit to provision for loan losses. DARTs increased on a year-over-year basis. The quarter also registered a rise in customer accounts and reduced delinquencies.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>