TD Ameritrade Raises Profits 35%: Q1 Earnings

The brokerage group has a 20% jump in revenue, as well as a 30% gain in fees and commissions

CEO Fred Tomczyk of TD Ameritrade. CEO Fred Tomczyk of TD Ameritrade.

TD Ameritrade (AMTD) said Wednesday that its net income in the quarter ended March 31 grew nearly 35% year over year, hitting $194 million, or $0.35 per share, beating estimates.

Revenues improved nearly 20% over the past 12 months to $812 million, as net new client assets hit $12.2 billion, an 8% annualized growth rate. Still, net assets for the company's fiscal second quarter fell below those of both the earlier period, $14.5 billion, and the same period of 2013, $12.9 billion.

The brokerage firm, though, boosted average daily client trades to about 492,000 in the most-recent quarter, up from 414,000 in the prior quarter and 378,000 in the year-ago period. 

TD Ameritrade’s earnings for the second quarter were up 35% year-over-year, driven by record trades per day as retail investor engagement continued to improve. In fact, our quarterly activity rate was the highest we’ve seen in a decade,” said President and CEO Fred Tomczyk, in a press release.

“Additionally, we continue to see strong asset gathering and demand for our guidance-based offerings,” Tomczyk said. “We remain focused on giving our clients access to a wide range of products, tools and education to help them pursue their goals.”

Overall client assets were $617 billion as of March 31, up 19% from last year’s $517 billion.

Commissions and transaction fees for the most recent period totaled $374 million vs. $328 million in the earlier quarter and $287 million a year earlier.  Investment-product fees jumped 21% from last year to $75 million.

Pretax profit margins, though, fell slightly from the prior period to 39% from 40%, but improved from 34% last year.  

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Check out ThinkAdvisor’s 2014 Q1 Earnings Calendar for the Finance Sector.

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