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What Does the Third Quarter Hold for TD Ameritrade?



What’s expected?

TD Ameritrade (AMTD) is expected to report an EPS of $0.8 in the fiscal third quarter, which ends in June. Wall Street analysts gave a high estimate of $0.85 and a low estimate of $0.76 for the third-quarter EPS. Sequentially, the company is expected to witness a marginal decline in its trading volumes in the third quarter due to less volatility in April.

In the March quarter, the primary drivers for the higher volatility were higher interest rate expectations and discussions about trade wars. Global economic factors that affect the stock markets also impact brokerages’ performances.

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TD Ameritrade’s revenues

TD Ameritrade is expected to report revenues of $1.36 billion in the fiscal third quarter—a substantial increase on a year-over-year basis. Wall Street analysts gave a low estimate of $1.32 billion and a high estimate of $1.39 billion for the third quarter revenues. In April, there wasn’t much volatility due to the strong earnings season. Sequentially, the brokerages will likely experience a dip in clients’ trading activities in the June quarter.

Charles Schwab (SCHW), Interactive Brokers Group (IBKR), and E*TRADE Financial (ETFC) are expected to generate revenues of $2.5 billion, $0.47 billion, and $0.70 billion, respectively, in the June quarter.

In May, there was volatility, which improved brokerages’ monthly metrics due to higher trading. As a result, the current month should be healthy for TD Ameritrade. Since another rate hike is expected in June, brokerages (VFH) might attract investors’ attention.


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