TD Ameritrade Holding Corp., the third-largest retail brokerage by client assets, reported fiscal third-quarter profit that beat the average analyst estimate as customers traded more and added assets to their accounts.
Net income rose 5.2 percent to $179.4 million during the period that ended June 30, compared with $170.5 million a year earlier, the Omaha, Nebraska-based company said today in a statement. Excluding some items, Ameritrade earned 30 cents a shares, beating the 28-cent average forecast from 15 analysts surveyed by Bloomberg.
Revenue from earned interest climbed 13 percent to $111.4 million. That brought total sales to $691.8 million for the quarter, beating the average estimate of $679.3 million, according to a Bloomberg survey. Ameritrade clients placed an average of 413,461 trades per day, compared with 391,506 a year earlier. The brokerage collected net new assets from customers of $8.9 billion, 29 percent higher than a year ago.
“Ameritrade's gone from a turn-around story to strongly growing assets,” Celeste Mellet Brown, a New York-based analyst with Morgan Stanley, wrote in a July 8 note. “The Street underestimates the company's asset growth potential. Net new assets continues to outperform.”
Shares of Ameritrade gained 0.3 percent yesterday to $15.82, trimming their 2010 decline to 18 percent. The Standard & Poor's 500 Index has retreated 3.9 percent, while the NYSE Arca Securities Broker/Dealer Index has slumped 11 percent.
Charles Schwab Corp., the largest independent brokerage by client assets, gained the most in more than two months after posting profit that beat estimates on July 16. E*Trade Financial Corp. is scheduled to post a loss of 11 cents a share on July 22, its 12th straight quarterly loss.
Ameritrade cut its 2010 earnings forecast to 90 cents to $1.10 a share on April 20, citing smaller asset-price swings. Analysts expect $1.04 a share, according to the average in a Bloomberg survey.
“The 5 percent equity market decline in June and declining consumer confidence highlights the macro headwinds Ameritrade is facing,” Daniel Harris, a New York-based analyst with Goldman Sachs Group Inc., wrote in a July 6 note. “We are more constructive on the longer-term growth story.”
Ameritrade also said it bought back 15 million shares at an average $17.25 each during the quarter through July 2, according to today's statement.
