Way to cheap!!!!!TD Ameritrade Profit Rises 36 Percent
Related information E-mail this article Print-friendly versionStocks mentioned in this articleTD Ameritrade Holding Corp. (AMTD) Stock Quote, Chart, News Bank of America Corporation (BAC) Stock Quote, Chart, News E*TRADE FINANCIAL Corporation (ET) Stock Quote, Chart, News Knight Capital Group Inc. (NITE) Stock Quote, Chart, News The Charles Schwab Corporation (SCHW) Stock Quote, Chart, News Related topicsEarnings Reports
All Associated Press NewsOMAHA, Neb. (AP) - Online brokerage TD Ameritrade Holding Corp. reported Tuesday that net earnings jumped 36 percent in its fiscal fourth quarter as the company continued to benefit from its latest acquisition.
Ameritrade earned $128.1 million, or 21 cents per share, on revenue of $488.7 million during the quarter. Analysts polled by Thomson Financial expected quarterly earnings per share of 22 cents on revenue of $505.3 million.
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Ameritrade acquired TD Waterhouse's U.S. retail securities business in January as part of a plan to attract more long-term investors and diversify its revenue stream. But the company is still working to integrate TD Waterhouse's assets.
"Everything we do in the next year will be based on successfully completing the integration and positioning our franchise for long-term success," Chief Executive Joe Moglia said. "We will be relentless in driving down costs, stimulating organic growth and becoming a more sales-focused organization."
During Ameritrade's 2006 fiscal year, the company earned $526.8 million, or 95 cents per share, up 55 percent from 2005. But when a one-time gain from the sale of its investment in Knight Capital Group Inc. is excluded, the company earned $483 million, or 87 cents per share, in 2006.
For the full fiscal year, analysts polled by Thomson Financial expected earnings per share of 89 cents on revenue of $1.83 billion.
Ameritrade said it generated revenue of $1.8 billion in 2006, up 80 percent from the previous year.
Moglia said the company also paid off about one-quarter of its debt during 2006 and repurchased 3.8 million shares of Ameritrade stock.
Ameritrade reported handling 204,480 trades a day on average during its fourth fiscal quarter, which is down from the 252,784 trades a day it handled during the third quarter.
Throughout the full year, Ameritrade handled 216,970 trades a day on average, up from the 155,696 trades a day it handled in 2005.
New concerns about a commission price war emerged earlier this month when Bank of America Corp. announced a plan to give some of its customers up to 30 free online trades a month if they have at least $25,000 in deposits.
So far, Ameritrade -- and rivals E-Trade Financial Corp. and Charles Schwab Corp. -- have resisted any pressure to cut their commissions in response, although the stock prices of all three brokerages took a hit after Bank of America's announcement.
Analyst Howard Chen with Credit Suisse First Boston said in a research note after Bank of America's announcement that he didn't think many Ameritrade customers would switch brokers because of the offer. The average Ameritrade customer makes 10.5 trades per year and holds an average cash and money market balance of $6,150 -- well below what Bank of America requires for free trades.
Ameritrade adjusted its earnings projections for fiscal 2007 on Tuesday to a range of 98 cents to $1.22 per share. That's a slightly larger range than the 99 cents to $1.21 per share the company predicted in July.
Analysts expect earnings per share of $1.20 in fiscal 2007.