TD Ameritrade Has 13% Drop in Quarterly Profits, But Boosts Net New Assets

The brokerage’s annual EPS declines 8% to $1.06, though this tops analysts’ expectations

TD Ameritrade officials ring the opening bell at the New York Stock Exchange. (Photo: AP) TD Ameritrade officials ring the opening bell at the New York Stock Exchange. (Photo: AP)

TD Ameritrade Holding Corp. (AMTD) on Monday announced a 13% drop in earnings for the fourth fiscal quarter due to a decline in commissions and transaction fees. The brokerage’s quarterly net income was posted at $143 million, with earnings per share of $0.26, down from $164 million, or EPS of $0.29, at this time a year ago.

Profits for the full year fell 8%, totaling $586 million, or EPS of $1.06, versus $638 million a year ago, or EPS of  $1.11. Net revenues fell 4% to $2.64 billion for the fiscal year ended on Sept. 30 versus $2.76 billion for fiscal 2011. Quarterly revenues came to $647 million compared with $667 million for the quarter ended June 30.

The Omaha, Neb.-based brokerage beat expectations. Analysts polled by Thomson Reuters expected TD Ameritrade to earn $1.05 per share for the year on revenues of $2.64 billion and quarterly EPS of $0.25.

Despite a continued difficult economic environment with persistently low interest rates, the brokerage saw an 11% rise in net new client assets for the full fiscal year to $40.8 billion and 359,631 average client trades per day. That compares with a 12% rise in assets and 398,986 trades per day in the previous fiscal year ending Sept. 30, 2011.

For the fiscal fourth quarter, the company had $10.1 billion in net new client assets, up from $9.7 billion in the previous quarter but down from $12.4 billion a year before. Average client trades per day for the most-recent quarter were 328,280 -- down from 355,449 in the quarter ending June 30 and a big dip pfrom 415,739 from the year-ago period.

In addition, TD Ameritrade reported record client assets of approximately $472 billion, up 25% year-over-year, along with a quarterly dividend increase of $0.09 per share, a 50% increase.

"In each of the last four years, TD Ameritrade has delivered industry-leading, double-digit growth in asset gathering," said Fred Tomczyk, president and CEO, in a statement. "In 2012 we grew total clients assets to a record $472 billion, up 25% year-over-year. We maintained our industry-leading position and again grew our market share in trading. And, we continued to make strategic investments in our client offering. We remain focused on what we can control, executing our strategy and building our long-term earnings power."

TD Ameritrade has postponed its conference call until Nov. 5 due to the superstorm that wreaked havoc on the East Coast the same day that the brokerage announced earnings.

For more Q3 2012 earnings news, see AdvisorOne’s 2012 Q3 Earnings Calendar for the Finance Sector.

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