TD Ameritrade climbs after results beat estimates
Shares of TD Ameritrade (AMTD) rose on Tuesday morning after quarterly results handily beat analysts' estimates. EARNINGS: TD Ameritrade reported third quarter earnings per share of 44c, a decline from 45c in the year-ago period but beating analysts' estimates of 41c per share. Revenue for the quarter was $931M, exceeding analysts' estimates of $897.81M and the $838M it reported last year. The company's quarterly results include record net new client assets of approximately $22B, an annualized growth rate of 10%. Average client trades per day were approximately 510,000, up 10% year over year. EXECUTIVE COMMENTARY: In a statement, President and Chief Executive Officer Tim Hockey commented that investors "remained broadly engaged, with strong trading volumes despite persistent low market volatility" and that the company is seeing "healthy trends in new account growth and asset inflows from both new and existing clients, and our institutional channel continues to break records for asset gathering." Hockey also noted that the company has "a lot to feel good about, but as we plan for the close of the Scottrade acquisition on the horizon, we have much more yet to do." On its earnings conference call, Chief Financial Officer Steve Boyle said the company expects the Scottrade acquisition to close in the September quarter. Boyle said the company anticipates including Scottrade-related assumptions in annual guidance that will be released with its October call, which will include "a more definitive view" on the benefit of interest rates. Management did not update its fiscal 2017 EPS guidance; the company had previously forecast EPS of $1.50-$1.80 and analysts currently expect $1.64. WHAT'S NOTABLE: Ahead of the company's earnings report, Rosenblatt analyst Chris Allen initiated TD Ameritrade with a Buy and a $50 price target saying the combination of the Scottrade acquisition, strong organic growth trends and higher rates will result in best in class earnings over the next three years. PRICE ACTION: TD Ameritrade is up 2.3% to $45.81 in early trading.