OMAHA, Neb. - Online brokerage TD Ameritrade Holding Corp. said Thursday that its net income soared 65 percent in its fiscal first quarter as trading activity increased and asset-based revenue continued to grow.
The Omaha-based company reported $240.8 million in net income, or 40 cents per share, in the quarter that ended Dec. 31. That's up from $145.6 million, or 24 cents per share, in the same period a year ago.
Revenue increased 20 percent, to $641.6 million, from last year's October-December figure of $535.2 million.
Analysts polled by Thomson Financial had expected a profit of 39 cents per share on revenue of $622.63 million.
Ameritrade's shares slipped 70 cents to $18.29 in midday trading.
Ameritrade's results exceeded the revised forecast company officials offered last month when they predicted earnings of 39 cents per share in the quarter. The company's original forecast called for earnings between 27 cents and 33 cents per share.
On Thursday, the company said it expects to earn between $1.23 and $1.41 per share this year.
Ameritrade has been able to draw customers away from rival E-Trade Financial Corp., which has been hurt by its investments in home loans. Analysts had predicted that Ameritrade and Charles Schwab Corp. could benefit from E-Trade's problems as its customers left in search of more-stable companies.
Ameritrade CEO Joe Moglia said about $2.3 billion, or about 25 percent, of the net new assets Ameritrade received during the quarter came from E-Trade customers who were moving their money.
During a conference call with analysts, Ameritrade officials emphasized what they said was their conservative approach to credit risks.
Credit Suisse analyst Howard Chen said in a research note that Ameritrade's fiscal year appears to be off to a solid start.
"We believe that TD Ameritrade has been a primary beneficiary of the disruptions at E-Trade," Chen said.
Ameritrade said it handled an average of 321,736 trades a day during the quarter, up from an average of 237,528 trades a day in the year-earlier quarter and 277,852 trades a day in the quarter that ended Sept. 30.
That led to a 34 percent increase in revenue from transaction fees. Ameritrade generated $260.3 million in transaction-based revenue in the quarter, up from $193.6 million a year ago.
More than half of Ameritrade's revenue came from asset-based fees, including money earned on deposit accounts and various investment products. The company said it generated $372.9 million on asset-based fees in the quarter, up 14 percent from the $327.2 million asset-based fees generated a year ago.
Ameritrade's acquisition of TD Waterhouse Group's U.S. retail securities business in January 2006 drove the increase in the company's asset-based revenue over the past two years.
Moglia said the company's efforts to capture a larger share of its customers' wallets is starting to pay off.
"Our sales efforts are gaining notable traction as our branches and service centers are focused on expanding relationships with clients," Moglia said.
Moglia has said the company wants one day to generate about 70 percent of its revenue from asset-based sources, which are more stable than transaction-based fees. In the most recent quarter, Ameritrade generated 58 percent of its revenue from asset-based sources.
No comments:
Post a Comment