July 20, 2010

TD Ameritrade Net New Assets in Q2 Up 30% vs. Last Year

The average fee-based balance for the April-June quarter was $62.4 billion, up from $59 billion a year ago and $59.5 billion in the previous quarter

TD Ameritrade Holding Corp. (AMTD) announced Tuesday, July 20, that net new client assets rose to nearly $9 billion in the quarter ended June 30, a jump of close to $3 billion or 30% over the same year-ago period but a drop of $1.3 billion or 13% from the previous quarter.

It also reported net income of $179 million, or $0.30 a share, beating analysts' estimates of $0.28. Revenue was $692 million, topping analysts' expectations of $683 million; some 47% of sales were asset based, the company says.

"With record trading and continued strong asset gathering results, we are quite happy with our performance this quarter," said President and CEO Fred Tomczyk in a press release. "Year-to-date, our net new client assets gathered are a record $28 billion, up 32% year-over-year and growing at an annualized rate of over 12%."

The company, based in Omaha, Nebraska, also said that average client trades per day were 413,000 in the most recent quarter, an increase of 6%. Gross new accounts of roughly 175,000 were down slightly from 176,000 in the June 2009 quarter and off about 5% from 186,000 in the previous three months.

"Our sound financial position and the successful execution of our strategy helped us increase asset-based revenues year-over-year by 24%," said Bill Gerber, executive vice president and CFO in a press release. "This, combined with record trading activity, led to a record $692 million in net revenues--a significant accomplishment given the ongoing low interest rate environment."

Client assets, about $324 billion, rose 22% from last year, but were down the previous three months by roughly 5%.

The average fee-based balance for the most recent period was $62.4 billion, up from about $59 billion a year ago and $59.5 billion in the earlier quarter of 2010.

The number of total accounts stands at 7.9 million, up from 7.5 billion a year ago. The company also reported some 5.4 billion in funded accounts vs. 5.3 billion last year.

Beginning in the April and through July 2, the company repurchased 15 million shares of its common stock at an average price of $17.25 per share as part of a stock-buyback program.

Its shares traded down, along with the broader markets mid-morning July 20, at $15.20.

Rival Charles Schwab, which reported earnings Friday, was also trading down at $14.75.

Read an interview with TD Ameritrade Trust President Skip Schweiss from the archives of InvestmentAdvisor.com.

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