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TD Ameritrade's fiscal 2Q earnings narrowly miss Wall Street estimates, despite buzz of trading activity

Last updated: 21:54 23 Apr 2018 BST, First published: 21:31 23 Apr 2018 BST

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Shares dipped in after-hours trade

TD Ameritrade Holding Corporation (NASDAQ:AMTD), the online U.S. brokerage house, reported second-quarter fiscal earnings that narrowly missed Wall Street expectations, but its results were helped by record trading activity.

 TD Ameritrade reported net earnings of $271mln in the three months until March's close, or US$0.48 per share, up from US$214mln, or US$0.40 per share, in the same period a year ago. On an adjusted basis, TD Ameritrade earned US$0.73 per share on net revenue of US$1.4bln. Wall Street analysts had expected the online broker to report US$0.74 per share.

The company took in US$22.2bln in new client money on a net basis for its fiscal second quarter and saw its trading activity rise to 943,000 trades per day on average, powered along by volatile markets.

“In our second quarter, market volatility returned in full force as the implications of tax reform became clearer, interest rates continued to rise, and tariff talks surprised the markets,” said Steve Boyle, executive vice president and chief financial officer. “These events drove record revenue in the quarter and more than offset some volatility-related losses.” 

Its client assets amounted to US$1.2 trillion in the quarter, which was up 40% from the year-ago quarter. The broker also declared a 21 cent per share quarterly dividend to be paid on May 22,2018.

TD Ameritrade’s pre-ta GAAP income came to US$372mln, or 26 per cent of its net revenues. 

TD Ameritrade’s shares dropped 2% in after-hours trade to US$60.

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