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TD Ameritrade Meets Q3 Earnings Expectations, Boosts Sales

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TD Ameritrade (AMTD) met earnings expectations in the quarter ended Sept. 30 and reported its results for fiscal 2015 early Tuesday.

In the latest quarter, TD Ameritrade had net income of $216 million, or $0.40 per share, up 5% year over year. Net revenues also grew 5% to $831 million; 55% of sales are asset based, according to the firm.

Net new client assets were $16.2 billion in the recent quarter, representing an annualized growth rate of 9%. Average client trades per day were about 479,000, up from roughly 434,000 in the year-ago quarter.

For the full fiscal year, the company gathered roughly $63 billion in net new client assets and maintained “a double-digit net new client asset growth rate for the seventh consecutive year,” it says. It had investment product fee revenue of $334 million, up 8% year over year, and client assets of about $667 billion, a 2% jump from the prior fiscal period.

The company does not break out its separate business results, such as those for Amerivest, its online retail advice platform, and AdvisorDirect, its service that refers clients to RIAs, in its financial statements.

However, during a conference call with analysts, President & CEO Fred Tomczyk explained that its institutional business continues to expand.

“Net new client assets for the channel were up 16%, driven by growth from both breakaway brokers and existing RIAs. Brokers and investors alike continue to move to the independent RIA model, and we have captured more than our fair share of the trend toward independence,” Tomczyk said.

“We continue to compete and win with our technology and top-line service offerings. In 2016, we’ll give our advisors a unified integrated experience with one login and consolidated account view across multiple apps they use to manage their business. We call it Veo One, and it’s unlike anything else in the industry. Early reviews on the platform have been very positive,” he added.

For the full fiscal year 2015, the company had net income of $813 million, or $1.49 per share, vs. $787 million, or $1.42 per share, in fiscal 2014.

“We will carry that momentum with us into fiscal 2016. We have a strong competitive position, an unrelenting client focus, and we remain well-aligned with the secular growth trends – which will serve to help us continue delivering strong organic growth and earnings,” Tomczyk said in a statement.

The company says it expects to report fiscal 2016 earnings of between $1.45 and $1.75 per share.

In addition, the company had total client assets of $667.4 billion as of Sept. 30, up from $653.1 billion a year earlier. The average fee-based investment balance was $156.1 billion as of Sept. 30, up from $135.7 billion in the prior fiscal year. Fee-based revenues for fiscal 2015 were $334 million, a jump from $309 million in fiscal 2014.

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