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TD Ameritrade Posts 30% Increase in Q1 Earnings on Record Revenue

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TD Ameritrade Holdings announced Tuesday net income of $192 million, or $0.35 a share, on record net revenue of $752 million, up 16% over the prior year, in its fiscal first quarter ended Dec. 31. In the prior year’s fiscal first quarter, AMTD had net income of $147 million, or $0.27 a share, on revenue of $651 million. Analysts’ consensus earnings estimates were for $0.33 a share.

In 2014’s fiscal first quarter, TD Ameritrade said it saw net new client assets of $14.5 billion, up from $10.1 billion in the prior quarter but down from a record $15.6 billion in the quarter ended Dec. 31, 2012. AMTD’s total client assets stood at $596.5 billion as of quarter’s end, up from  $480.8 billion the prior year. Also in Q1 of 2014, the company said it had average client trades per day of approximately 413,743, compared to the year-earlier period’s 334,035 daily trades.

The numbers led TD Ameritrade CEO Fred Tomczyk to say in a prepared statement that “client engagement has trended upward following continued improvement in the macroeconomic environment and retail investor sentiment.” He also noted that trading activity “was at its highest level in more than two years. The trading and investing environment has definitely improved, and we are off to a good start to fiscal 2014.”

In an earnings conference call on Tuesday, Tomczyk said that “we started fiscal 2014 with a strong first quarter … leveraging our continued strong organic growth as retail investors re-engaged with the markets,” helped by “less uncertainty in Washington.” He said the company is also experiencing a strong second quarter so far. Client assets, he said, are “closing in on our record $600 billion,” while fee-based balances are at “a record $136 billion, up 31% year over year.”

As for the company’s RIA custodial business, TD Ameritrade Institutional, Tomczyk said on the earnings call that the RIA channel “remains a strong contributor” to the company’s increase in net new client assets. In addition, he said TDAI’s RIA “pipelines remain strong,” including breakaway brokers. He also pointed out that TDAI’s national conference will be held starting Jan. 29 in Orlando, at which a “record number of prospective and current clients” is expected, and at which TDAI will introduce “several technology initiatives.”

Check out ThinkAdvisor’s Q4 Earnings Calendar for the Finance Sector.