TD Ameritrade’s strong results
TD Ameritrade (AMTD) released its third fiscal quarter results on July 23. The company posted an EPS of $0.89, which exceeded analysts’ expectations by $0.09 and reflected 85% growth YoY (year-over-year). The company witnessed a substantial fall in the total operating expenses from $1.02 billion in the second fiscal quarter to $751 million in the third fiscal quarter.
TD Ameritrade’s average client trades per day fell from 943,058 in the second fiscal quarter to 783,665 in the third fiscal quarter due to less movement in the stock markets. Other brokerage players (VFH) also witnessed the same impact.
Charles Schwab’s (SCHW) trading revenues fell 10% on a sequential basis in the second quarter. Interactive Brokers Group’s (IBKR) commissions fell from $220 million in the first quarter to $185 million in the second quarter. E*TRADE Financial’s (ETFC) daily average revenue trades fell from 309,469 in the first quarter to 258,844 in the second quarter.
Revenues beat the expectations
In the third fiscal quarter, TD Ameritrade’s revenues were $1.38 billion, which exceeded the expectations by $30 million. During the same period, the company witnessed net new client assets of $19.8 billion, which implies a fall of 10% on a YoY basis. The company ended the third fiscal quarter with total client assets of $1.2 trillion, which reflects 39% growth YoY.
TD Ameritrade is focusing on making investing easy by using digital tools. In the third fiscal quarter, the company rolled out “Personalized Portfolios.” During the same period, the company made total distributions of $119 million in the form of cash dividends.