TD Ameritrade Reports Positive Quarter, Scottrade Acquisition Closure Nears

TD Ameritrade, one of the largest brokers for retail clients in the US, today released its second quarter earning results. The firm reports a net profit of $231 million, which is a decrease of 4 percent year-on-year. The revenue for the period grew 11 percent from the previous year to $931 million on the back of strong trading volumes and asset based revenue growth.

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The company reported EBITDA (earnings before interest, tax, depreciation and amortisation) of $437 million, an increase of 11 percent on a year-on-year basis, representing 47 percent of the total revenue. Pretax income grew 12 percent from a year ago to $373 million and is 40 percent of the net revenue. Earnings per share (EPS) stood at $0.44, which is a marginal decline of 2 percent when compared to the same period last year.

During the second quarter, the company added a record $22 billion of net new client assets to mark a record of $882 billion, which is an annualised increase of 10 percent. For the quarter ending June 2017, net new asset growth rate was up by 33 percent to $60.2 billion. The company recorded 510,000 average client trades every day.

The company has maintained its forecast for fiscal 2017 on the back of robust investor engagement, high trading volumes and asset based revenue growth. For fiscal 2017, it is aiming for an addition of $85 billion to net new client assets, a 42 percent share in revenue for pre-tax margin and EPS of $1.80.

Commenting on the earnings report, the CEO of TD Ameritrade Tim Hockey said: “Investors remained broadly engaged, with strong trading volumes despite persistent low market Volatility . We’re seeing healthy trends in new account growth and asset inflows from both new and existing clients, and our institutional channel continues to break records for asset gathering."

"Our technology pipelines are full of enhancements that address client irritants and introduce new, cutting edge solutions. We have a lot to feel good about, but as we plan for the close of the Scottrade Acquisition on the horizon, we have much more yet to do," Hockey elaborated.