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Share Name | Share Symbol | Market | Type |
---|---|---|---|
TD Ameritrade Holding Corporation | NASDAQ:AMTD | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 39.97 | 39.94 | 39.97 | 0 | 01:00:00 |
Net New Client Assets of $22.2BRecord Average Client Trades per Day of 943,000GAAP Diluted EPS $0.48; Non-GAAP Diluted EPS $0.73 (1)
TD Ameritrade Holding Corporation (Nasdaq: AMTD) has released results for the second quarter of fiscal 2018. The Company gathered $22.2 billion in net new client assets for the quarter and reported record client trading activity of approximately 943,000 client trades per day, on average. These results were driven by a resurgence of volatility in the equity markets, which in turn increased investor engagement and trading.
Financial results for the quarter ended March 31, 2018 include the following:(2)
“Early results of our dual strategy to successfully integrate Scottrade while continuing to accelerate and diversify revenue growth in our core business have exceeded our expectations,” said Tim Hockey, TD Ameritrade president and chief executive officer. “With the Scottrade client conversion now successfully behind us, we are turning our focus to increasing our momentum and profitably growing our business. Further enhancing the client experience, investing in innovation and employee development, and increasing our competitive edge will be our priorities as we work through the balance of the fiscal year.”
“In our second quarter, market volatility returned in full force as the implications of tax reform became clearer, interest rates continued to rise, and tariff talks surprised the markets,” said Steve Boyle, executive vice president and chief financial officer. “These events drove record revenue in the quarter and more than offset some volatility-related losses. Scottrade expense synergies remain on track, and we expect total operating expenses to decline significantly over the remainder of the fiscal year. Leading with technology remains a key focus that necessitates continued investment in order to enhance our offerings and drive efficient growth in the future.”
Capital ManagementThe Company paid $119 million, or $0.21 per share, in cash dividends in its second fiscal quarter.
The Company has declared a $0.21 per share quarterly cash dividend, payable on May 22, 2018 to all holders of record of common stock as of May 8, 2018.
Company Hosts Conference CallTD Ameritrade will hold its March Quarter conference call tomorrow morning, April 24, 2018, at 8:30 a.m. EDT (7:30 a.m. CDT) to take questions from analysts. Participants may listen to the conference call by dialing 866-393-4306. A complete audio recording of management’s remarks, an abridged text version of the remarks, a financial fact sheet containing associated details, as well as a supplemental FAQ are now available on the “Financial Reports” page of www.amtd.com under the header “Second Quarter 2018.” Conference call participants are encouraged to reference these materials prior to the call.
A replay of the phone call will be available by dialing 855-859-2056 and entering the Conference ID 4581279 beginning at 11:30 a.m. EDT (10:30 a.m. CDT) on April 24, 2018. The replay will be available until 11:59 p.m. EDT (10:59 p.m. CDT) on May 1, 2018. A transcript of the call will be available on the Company’s corporate web site, www.amtd.com, via the “Financial Reports” page beginning Wednesday, April 25, 2018.
More information about TD Ameritrade’s upcoming corporate events and management speaking engagements, such as quarterly earnings conference calls, are available on the Company’s Corporate Event Calendar. Look for the link “Where are we?” on the “Investor Relations” page of www.amtd.com.
Interested parties should visit or subscribe to newsfeeds at www.amtd.com for the most up-to-date information on corporate financial reports, press releases, SEC filings and events. The Company also communicates this information via Twitter, @TDAmeritradePR. Website links, corporate titles and telephone numbers provided in this release, although correct when published, may change in the future.
Source: TD Ameritrade Holding Corporation
About TD Ameritrade Holding CorporationTD Ameritrade provides investing services and education to more than 11 million client accounts totaling $1.2 trillion in assets, and custodial services to more than 6,000 registered investment advisors. We are a leader in U.S. retail trading, executing an average of more than 940,000 trades per day for our clients, nearly a quarter of which come from mobile devices. We have a proud history of innovation, dating back to our start in 1975, and today our team of 10,000-strong is committed to carrying it forward. Together, we are leveraging the latest in cutting edge technologies and one-on-one client care to transform lives, and investing, for the better. Learn more by visiting TD Ameritrade’s newsroom at www.amtd.com, or read our stories at Fresh Accounts.
Safe HarborThis document contains forward-looking statements within the meaning of the federal securities laws. We intend these forward-looking statements to be covered by the safe harbor provisions of the federal securities laws. In particular, any projections regarding our future revenues, expenses, earnings, capital expenditures, effective tax rates, client trading activity, accounts, stock price or any projections or expectations regarding the acquisition of Scottrade Financial Services, Inc., as well as the assumptions on which such expectations are based, are forward-looking statements. These statements reflect only our current expectations and are not guarantees of future performance or results. These statements involve risks, uncertainties and assumptions that could cause actual results or performance to differ materially from those contained in the forward-looking statements. These risks, uncertainties and assumptions include, but are not limited to: economic, social and political conditions and other securities industry risks; interest rate risks; liquidity risks; credit risk with clients and counterparties; risk of liability for errors in clearing functions; systemic risk; systems failures, delays and capacity constraints; network security risks; competition; reliance on external service providers; new laws and regulations affecting our business; net capital requirements; extensive regulation, regulatory uncertainties and legal matters; difficulties and delays in integrating the Scottrade Financial Services, Inc. ("Scottrade") business or fully realizing cost savings and other benefits from the acquisition; business disruption following the Scottrade acquisition; disruptions due to Scottrade integration-related uncertainty or other factors making it more difficult to maintain relationships with employees, customers, other business partners or governmental entities; the inability to achieve synergies or to implement integration plans and other consequences associated with other acquisitions; and the other risks and uncertainties set forth under Item 1A. – Risk Factors of the Company's annual report on Form 10-K for the fiscal year ended September 30, 2017. These forward-looking statements speak only as of the date on which the statements were made. We undertake no obligation to publicly update or revise these statements, whether as a result of new information, future events or otherwise, except to the extent required by the federal securities laws.
1 See attached reconciliation of non-GAAP financial measures.
2 Please see the Glossary of Terms, located in “Investor” section of www.amtd.com for more information on how these metrics are calculated.
3 Interest rate-sensitive assets consist of spread-based assets and money market mutual funds. Ending balances as of March 31, 2018.
Brokerage services provided by TD Ameritrade, Inc., member FINRA (www.FINRA.org) /SIPC (www.SIPC.org).
TD AMERITRADE HOLDING CORPORATION CONSOLIDATED STATEMENTS OF INCOME In millions, except per share amounts (Unaudited) Quarter Ended Six Months Ended Mar. 31, 2018 Dec. 31, 2017 Mar. 31, 2017 Mar. 31, 2018 Mar. 31, 2017 Revenues: Transaction-based revenues: Commissions and transaction fees $ 556 $ 440 $ 365 $ 996 $ 719 Asset-based revenues: Bank deposit account fees 381 381 269 762 514 Net interest revenue 308 276 154 585 305 Investment product fees 141 133 103 274 197 Total asset-based revenues 830 790 526 1,621 1,016 Other revenues 29 27 13 55 27 Net revenues 1,415 1,257 904 2,672 1,762 Operating expenses: Employee compensation and benefits 461 415 229 875 443 Clearing and execution costs 56 47 37 103 73 Communications 46 53 29 99 64 Occupancy and equipment costs 79 80 45 160 89 Depreciation and amortization 35 34 25 69 49 Amortization of acquired intangible assets 37 38 19 75 38 Professional services 86 74 59 160 111 Advertising 90 64 80 154 137 Other 129 116 23 245 47 Total operating expenses 1,019 921 546 1,940 1,051 Operating income 396 336 358 732 711 Other expense: Interest on borrowings 24 20 14 44 28 Loss on sale of investments - 11 - 11 - Other - 2 - 2 - Total other expense 24 33 14 57 28 Pre-tax income 372 303 344 675 683 Provision for income taxes(1) 101 6 130 107 253 Net income $ 271 $ 297 $ 214 $ 568 $ 430 Earnings per share - basic $ 0.48 $ 0.52 $ 0.41 $ 1.00 $ 0.81 Earnings per share - diluted $ 0.48 $ 0.52 $ 0.40 $ 1.00 $ 0.81 Weighted average shares outstanding - basic 567 567 528 567 528 Weighted average shares outstanding - diluted 570 569 530 569 530 Dividends declared per share $ 0.21 $ 0.21 $ 0.18 $ 0.42 $ 0.36 (1) The provision for income taxes was lower for the six months ended March 31, 2018, primarily due to the realization of approximately $78 million of after-tax benefits recognized during the quarter ended December 31, 2017. These after-tax benefits were primarily attributable to the enactment of the Tax Cuts and Jobs Act for which we recorded a provisional estimate for the remeasurement of our deferred income tax balances. TD AMERITRADE HOLDING CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS In millions (Unaudited) Mar. 31, 2018 Sept. 30, 2017 Assets: Cash and cash equivalents $ 1,373 $ 1,472 Segregated cash and investments 6,863 10,446 Broker/dealer receivables 1,395 1,334 Client receivables, net 20,823 17,151 Investments available-for-sale, at fair value 488 746 Goodwill and intangible assets 5,597 5,683 Other 1,871 1,795 Total assets $ 38,410 $ 38,627 Liabilities and stockholders' equity: Liabilities: Broker/dealer payables $ 3,093 $ 2,504 Client payables 23,848 25,107 Long-term debt and other borrowings 2,795 2,652 Other 1,079 1,117 Total liabilities 30,815 31,380 Stockholders' equity 7,595 7,247 Total liabilities and stockholders' equity $ 38,410 $ 38,627 NOTE: The Condensed Consolidated Balance Sheets include provisional estimates related to property acquired and liabilities assumed in the Scottrade acquisition. These provisional estimates may be prospectively adjusted in the event new information becomes available regarding facts and circumstances which existed at the date of acquisition. TD AMERITRADE HOLDING CORPORATION SELECTED OPERATING DATA (Unaudited) Quarter Ended Six Months Ended Mar. 31, 2018 Dec. 31, 2017 Mar. 31, 2017 Mar. 31, 2018 Mar. 31, 2017Key Metrics:
Net new assets (in billions) $22.2 $26.5 $19.5 $48.6 $38.1 Net new asset growth rate (annualized) 8 % 9 % 10 % 9 % 10 % Average client trades per day 943,058 726,438 516,994 833,432 501,837Profitability Metrics:
Operating margin 28.0 % 26.7 % 39.6 % 27.4 % 40.4 % Pre-tax margin 26.3 % 24.1 % 38.1 % 25.3 % 38.8 % Return on average stockholders' equity (annualized) 14.4 % 16.2 % 16.3 % 15.3 % 16.6 % Net profit margin 19.2 % 23.6 % 23.7 % 21.3 % 24.4 % EBITDA(1) as a percentage of net revenues 33.1 % 31.4 % 44.5 % 32.3 % 45.3 %Liquidity Metrics:
Interest on borrowings (in millions) $24 $20 $14 $44 $28 Interest coverage ratio (EBITDA(1)/interest on borrowings) 19.5 19.8 28.7 19.6 28.5 Cash and cash equivalents (in billions) $1.4 $1.6 $2.2 $1.4 $2.2Liquid assets available for corporate investing and financing activities(1) (in billions)
$0.5 $0.1 $1.0 $0.5 $1.0Transaction-Based Revenue Metrics:
Total trades (in millions) 57.5 45.4 32.1 102.9 62.5 Average commissions per trade(2) $7.50 $7.54 $8.79 $7.52 $8.92 Trading days 61.0 62.5 62.0 123.5 124.5 Order routing revenue (in millions) $125 $98 $83 $222 $162Spread-Based Asset Metrics:
Average bank deposit account balances (in billions) $118.3 $119.1 $95.1 $118.7 $94.2 Average interest-earning assets (in billions) 32.0 31.6 24.6 31.8 24.5 Average spread-based balances (in billions) $150.3 $150.7 $119.7 $150.5 $118.7 Bank deposit account fee revenue (in millions) $381 $381 $269 $762 $514 Net interest revenue (in millions) 308 276 154 585 305 Spread-based revenue (in millions) $689 $657 $423 $1,347 $819 Avg. annualized yield - bank deposit account fees 1.29 % 1.25 % 1.13 % 1.27 % 1.08 % Avg. annualized yield - interest-earning assets 3.86 % 3.42 % 2.50 % 3.64 % 2.46 % Net interest margin (NIM) 1.83 % 1.71 % 1.41 % 1.77 % 1.36 %Fee-Based Investment Metrics:
Money market mutual fund fees:
Average balance (in billions) $4.0 $3.8 $3.5 $3.9 $3.6 Average annualized yield 0.42 % 0.43 % 0.44 % 0.43 % 0.41 % Fee revenue (in millions) $4 $4 $4 $8 $8Market fee-based investment balances:
Average balance (in billions) $247.7 $226.2 $176.9 $236.8 $171.8 Average annualized yield 0.22 % 0.22 % 0.22 % 0.22 % 0.22 % Fee revenue (in millions) $137 $129 $99 $266 $189 Average fee-based investment balances (in billions) $251.7 $230.0 $180.4 $240.7 $175.4 Average annualized yield 0.22 % 0.23 % 0.23 % 0.23 % 0.22 % Investment product fee revenue (in millions) $141 $133 $103 $274 $197 (1) See attached reconciliation of non-GAAP financial measures. (2) Effective in September 2017, the average commissions per trade metric was revised to exclude order routing revenue. Prior periods have been updated to conform to the current presentation. NOTE: See Glossary of Terms on the Company's website at www.amtd.com for definitions of the above metrics. TD AMERITRADE HOLDING CORPORATION SELECTED OPERATING DATA (Unaudited) Quarter Ended Six Months Ended Mar. 31, 2018 Dec. 31, 2017 Mar. 31, 2017 Mar. 31, 2018 Mar. 31, 2017Client Account and Client Asset Metrics:
Funded accounts (beginning of period) 11,129,000 11,004,000 7,046,000 11,004,000 6,950,000 Funded accounts (end of period) 11,266,000 11,129,000 7,189,000 11,266,000 7,189,000 Percentage change during period 1 % 1 % 2 % 2 % 3 % Client assets (beginning of period, in billions) $1,178.8 $1,118.5 $797.0 $1,118.5 $773.8 Client assets (end of period, in billions) $1,185.7 $1,178.8 $846.7 $1,185.7 $846.7 Percentage change during period 1 % 5 % 6 % 6 % 9 %Net Interest Revenue:
Segregated cash:
Average balance (in billions) $8.7 $9.9 $8.7 $9.3 $8.7 Average annualized yield 1.31 % 1.09 % 0.46 % 1.19 % 0.38 % Interest revenue (in millions) $28 $28 $10 $56 $17Client margin balances:
Average balance (in billions) $19.1 $17.6 $11.9 $18.3 $11.9 Average annualized yield 4.45 % 4.25 % 3.67 % 4.35 % 3.61 % Interest revenue (in millions) $213 $191 $109 $404 $217Securities borrowing/lending:
Average securities borrowing balance (in billions) $0.9 $1.1 $0.9 $1.0 $0.9 Average securities lending balance (in billions) $2.8 $2.6 $1.7 $2.7 $1.8 Net interest revenue - securities borrowing/lending (in millions) $61 $53 $31 $114 $65Other cash and interest-earning investments:
Average balance (in billions) $3.3 $3.0 $3.1 $3.2 $3.0 Average annualized yield 1.03 % 0.82 % 0.54 % 0.93 % 0.49 % Interest revenue - net (in millions) $8 $6 $4 $15 $7Client credit balances:
Average balance (in billions) $21.5 $21.4 $16.1 $21.4 $16.1 Average annualized cost 0.04 % 0.03 % 0.01 % 0.03 % 0.01 % Interest expense (in millions) ($2 ) ($2 ) ($0 ) ($4 ) ($1 ) Average interest-earning assets (in billions) $32.0 $31.6 $24.6 $31.8 $24.5 Average annualized yield 3.86 % 3.42 % 2.50 % 3.64 % 2.46 % Net interest revenue (in millions) $308 $276 $154 $585 $305 NOTE: See Glossary of Terms on the Company's website at www.amtd.com for definitions of the above metrics. TD AMERITRADE HOLDING CORPORATION RECONCILIATION OF NON-GAAP FINANCIAL MEASURES Dollars in millions, except per share amounts (Unaudited) Quarter Ended Six Months Ended Mar. 31, 2018 Dec. 31, 2017 Mar. 31, 2017 Mar. 31, 2018 Mar. 31, 2017Non-GAAP Net Income and Non-GAAP Diluted EPS (1)
Amount Diluted EPS Amount Diluted EPS Amount Diluted EPS Amount Diluted EPS Amount Diluted EPS Net income and diluted EPS - GAAP $ 271 $ 0.48 $ 297 $ 0.52 $ 214 $ 0.40 $ 568 $ 1.00 $ 430 $ 0.81 Non-GAAP adjustments: Amortization of acquired intangible assets 37 0.06 38 0.07 19 0.04 75 0.13 38 0.07 Acquisition-related expenses 158 0.28 179 0.31 8 0.02 337 0.59 11 0.02 Income tax effect of above adjustments (52 ) (0.09 ) (59 ) (0.10 ) (10 ) (0.02 ) (111 ) (0.19 ) (19 ) (0.03 ) Non-GAAP net income and non-GAAP diluted EPS $ 414 $ 0.73 $ 455 $ 0.80 $ 231 $ 0.44 $ 869 $ 1.53 $ 460 $ 0.87 Quarter Ended Six Months Ended Mar. 31, 2018 Dec. 31, 2017 Mar. 31, 2017 Mar. 31, 2018 Mar. 31, 2017 $ % of Net Rev. $ % of Net Rev. $ % of Net Rev. $ % of Net Rev. $ % of Net Rev.EBITDA (2)
Net income - GAAP $ 271 19.2 % $ 297 23.6 % $ 214 23.7 % $ 568 21.3 % $ 430 24.4 % Add: Depreciation and amortization 35 2.5 % 34 2.7 % 25 2.8 % 69 2.6 % 49 2.8 % Amortization of acquired intangible assets 37 2.6 % 38 3.0 % 19 2.1 % 75 2.8 % 38 2.2 % Interest on borrowings 24 1.7 % 20 1.6 % 14 1.5 % 44 1.6 % 28 1.6 % Provision for income taxes 101 7.1 % 6 0.5 % 130 14.4 % 107 4.0 % 253 14.4 % EBITDA - non-GAAP $ 468 33.1 % $ 395 31.4 % $ 402 44.5 % $ 863 32.3 % $ 798 45.3 % As of Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31, 2018 2017 2017 2017 2017Liquid Assets Available for Corporate Investing and Financing Activities (3)
Cash and cash equivalents - GAAP $ 1,373 $ 1,644 $ 1,472 $ 2,880 $ 2,231 Less: Non-corporate cash and cash equivalents (1,013 ) (844 ) (1,174 ) (973 ) (1,286 ) Corporate cash and cash equivalents 360 800 298 1,907 945 Corporate investments 292 - 714 747 747 Less: Corporate liquidity maintained for operational contingencies (248 ) (723 ) (723 ) (723 ) (723 ) Amounts maintained for corporate working capital (65 ) (65 ) (87 ) (87 ) (87 ) Amounts held as collateral for derivative contracts, net - (8 ) (40 ) (34 ) (40 ) Excess corporate cash and cash equivalents and investments 339 4 162 1,810 842 Excess regulatory net capital over management targets 119 85 46 8 122 Liquid assets available for corporate investing and financing activities - non-GAAP $ 458 $ 89 $ 208 $ 1,818 $ 964 Note: The term "GAAP" in the following explanation refers to generally accepted accounting principles in the United States. (1) Non-GAAP net income and non-GAAP diluted earnings per share (EPS) are non-GAAP financial measures as defined by SEC Regulation G. We define non-GAAP net income as net income adjusted to remove the after-tax effect of amortization of acquired intangible assets and acquisition-related expenses. We consider non-GAAP net income and non-GAAP diluted EPS as important measures of our financial performance because they exclude certain items that may not be indicative of our core operating results and business outlook and may be useful in evaluating the operating performance of the business and facilitating a meaningful comparison of our results in the current period to those in prior and future periods. Amortization of acquired intangible assets is excluded because management does not believe it is indicative of our underlying business performance. Acquisition-related expenses are excluded as these costs are not representative of the costs of running the Company’s on-going business. Non-GAAP net income and non-GAAP diluted EPS should be considered in addition to, rather than as a substitute for, GAAP net income and diluted EPS.(2)
EBITDA (earnings before interest, taxes, depreciation and amortization) is considered a non-GAAP financial measure as defined by SEC Regulation G. We consider EBITDA to be an important measure of our financial performance and of our ability to generate cash flows to service debt, fund capital expenditures and fund other corporate investing and financing activities. EBITDA is used as the denominator in the consolidated leverage ratio calculation for covenant purposes under our senior revolving credit facility. EBITDA eliminates the non-cash effect of tangible asset depreciation and amortization and intangible asset amortization. EBITDA should be considered in addition to, rather than as a substitute for, GAAP pre-tax income, net income and cash flows from operating activities.
(3)
Liquid assets available for corporate investing and financing activities is considered a non-GAAP financial measure as defined by SEC Regulation G. We consider "liquid assets available for corporate investing and financing activities" to be an important measure of our liquidity. We include the excess capital of our regulated subsidiaries in the calculation of liquid assets available for corporate investing and financing activities, rather than simply including regulated subsidiaries' cash and cash equivalents, because capital requirements may limit the amount of cash available for dividend from the regulated subsidiaries to the parent company. Excess capital, as defined below, is generally available for dividend from the regulated subsidiaries to the parent company. Liquid assets available for corporate investing and financing activities should be considered as a supplemental measure of liquidity, rather than as a substitute for GAAP cash and cash equivalents.
We define liquid assets available for corporate investing and financing activities as the sum of (a) excess corporate cash and cash equivalents and investments, less securities sold under agreements to repurchase, and (b) our regulated subsidiaries' net capital in excess of minimum operational targets established by management. Excess corporate cash and cash equivalents and investments includes cash and cash equivalents from our investment advisory subsidiaries and excludes (i) amounts being maintained to provide liquidity for operational contingencies, including amounts available to be drawn by our broker-dealer and FCM/FDM subsidiaries under the Parent's intercompany committed lines of credit, (ii) amounts maintained for corporate working capital and (iii) the net amounts held as collateral for derivative contracts. Liquid assets available for corporate investing and financing activities is based on more conservative measures of net capital than regulatory requirements because we generally manage to higher levels of net capital at our regulated subsidiaries than the regulatory thresholds require.
View source version on businesswire.com: https://www.businesswire.com/news/home/20180423006270/en/
TD Ameritrade Holding CorporationBecky Niiya, 402-574-6652Director, Corporate Communicationsrebecca.niiya@tdameritrade.comorJeff Goeser, 402-597-8464Director, Investor Relationsjeffrey.goeser@tdameritrade.com
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