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What’s TD Ameritrade’s Focus in Fiscal 3Q16?

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Expanded customer base

TD Ameritrade (AMTD) is expected to post earnings per share (or EPS) of $0.37 in fiscal 3Q16 ended June 30, 2016, higher by one cent year-over-year. The company is expected to see marginal growth of 5% in its bottom line in fiscal 2016.

TD is expected to see higher revenue, up by 4% in the quarter. However, as commissions fall on competition and spending rises for new initiatives, this growth won’t translate into higher net earnings.

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TD Ameritrade met Wall Street analysts’ consensus EPS estimate of $0.38 in fiscal 2Q16. The company reported a rise in net profits of $205 million in fiscal 2Q16 compared to $189 million in fiscal 2Q15. TD Ameritrade expanded its assets and customer base during the quarter. Total customer assets stood at $711 billion in 2Q16, a rise of 2% compared to fiscal 2Q15. New client assets rose by 8% to $14 billion in fiscal 2Q16.

TD is focusing on adding new client assets in order to garner value as volatility increases in the domestic and global markets.

Financial services

TD Ameritrade Holding’s services cater to clients trading in common and preferred stocks, futures and options, foreign exchange, new and secondary issue securities, American depositary receipts, closed-end funds, ETFs, mutual funds, fixed income securities, margin lending, cash management services, and annuities. TD Ameritrade provides client offerings primarily through trading and investing platforms.

Some of TD Ameritrade’s peers in the brokerage industry include E*TRADE (ETFC), which beat estimates, Interactive Brokers Group (IBKR), which beat estimates, and Charles Schwab (SCHW), which met estimates.

Together, these companies form 0.26% of the SPDR S&P 500 ETF (SPY).

In the following parts of the series, we’ll discuss the company’s daily trades, new products and strategies, client assets, dividends, and valuations.

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