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TD Ameritrade Reports Strong Results, Beats Revenue Estimates

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Jan. 25 2018, Published 2:48 p.m. ET

Earnings estimates

In 1Q18, TD Ameritrade (AMTD) reported strong results, with EPS (earnings per share) of $0.52—in line with Wall Street analysts’ estimates. The company saw strong results thanks to its Scottrade acquisition and positive response from investors. The company reported an average of ~726,000 trades per day and $26.5 billion in new client assets in fiscal 1Q18.

TD Ameritrade has positive views for fiscal 2018 and expects its core metrics to see favorable momentum moving forward. Whereas TD Ameritrade has a beta value of 1.7, peers (XLF) Financial Engines (FNGN), Raymond James Financial (RJF), and CBOE Global Markets (CBOE) have beta values of 2.7, 1.9, and 0.28, respectively.

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Revenue estimates

TD Ameritrade generated revenue of $1.3 billion in fiscal 1Q18, exceeding analysts’ estimate by $60 million. The company received a positive response to its digital solutions and saw favorable momentum in its new accounts and mobile offerings. TD Ameritrade’s various service centers have maintained their focus on educating customers and helping them make investment decisions.

TD Ameritrade believes that its 1Q18 GAAP (generally accepted accounting principles) and non-GAAP results were boosted by favorable momentum in the markets, US tax reform, and the Fed’s rate hike. Scottrade earnings were also a major contributor.

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