Parent company TD Bank Group (TSX: TD) said it expects an uptick in the net income of TD Ameritrade Holding Corporation (NASDAQ: AMTD)
SmallCapPower | July 21, 2017: TD Bank Group (TSX: TD), the parent company of TD Ameritrade Holding Corporation (NASDAQ: AMTD), said recently it expects TD Ameritrade’s third-quarter earnings to translate into ~$122 million in net income as compared with $121 million for the prior year quarter.
TD Ameritrade announced its third-quarter 2017 results on July 18, 2017. Client assets saw a growth of 20% to reach a record US$882 billion, acquiring US$22 billion (up 62% YoY) in net new client assets. Average client trades per day rose 10% to ~510,000. Shares of TD Ameritrade have climbed ~ 4% to reach US$46.52 post the quarterly results.
Net revenues increased 11% YoY to US$931 million, despite softening trading commissions to US$6.95 from US$9.95. Quarterly profit fell 2% to US$231 million, or 44 cents a share. The per-share results beat the average estimate of Wall Street analysts surveyed by Zacks Investment Research of 41 cents.
TD Ameritrade’s CFO Steve Boyle said, “It was another eventful quarter as major indices hit all-time highs and the Fed raised interest rates for the third time in the fiscal year. These factors accelerated our organic growth and provided revenue tailwinds, as anticipated. While this is certainly good news and provides us with even more strategic flexibility in fiscal 2018, we remain committed to thoughtful expense management, balancing new investments with the needs of our clients, employees and shareholders.”
TD Ameritrade currently trades at price to TTM sales of 7.28x, price to book value of 4.61x and forward PE of 22.92x.
In terms of valuation, TD Bank Group currently trades at price to TTM sales of 3.42x, price to book value of 1.77x and forward PE of 11.56x.
Disclosure: Neither the author nor any of the principals at Small Cap Power, or their family members, own shares in any of the companies mentioned above.
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