Brokerage TD Ameritrade Holding Corp. (AMTD) reported Tuesday a decline in third-quarter profit, on lower commissions and transaction fees, reflecting reduced volumes. However, asset-based revenues grew from the prior year. On a per share basis, earnings increased and topped analysts' expectations, while net revenues decreased, but came in above view.
During the period, total trades dropped to 22.4 million from 23.3 million a year ago. Average commissions and transaction fees per trade decreased to $11.88 from $12.08 in the previous year.
Fred Tomczyk, president and chief executive officer of the company said, "TD Ameritrade continued its organic growth momentum despite the difficult operating environment...and we remain well positioned to deal with today's uncertain macroeconomic environment."
The company said its year-to-date net new client assets were $30.7 billion, an annualized growth rate of 11 percent.
In the third quarter, the Omaha, Nebraska-based company's net income declined to $153.83 million from $157.4 million reported last year. On a per share basis, earnings increased to $0.28 from $0.27 a year ago, reflecting lower share count. On average, 21 analysts polled by Thomson Reuters expected earnings per share of $0.26 for the quarter. Analysts' estimates typically exclude one-time items.
Net revenues for the quarter declined to $667.27 million from $684.78 million in the same quarter last year, but was above analysts' estimate of $660.83 million. The company noted that 57 percent of its net revenues were asset-based.
Commissions and transaction fees for the recent quarter declined to $266.08 million from $281.59 million a year ago. Total asset-based revenues were $378.74 million, up from $372.04 million in the preceding year.
At the end of the quarter, the company had net new assets of $9.7 billion, up from $7.9 billion in the previous year. Net new assets reflect an annualized growth rate of 9 percent. Average client trades per day declined to 355,449 from 369,716 in the prior-year period.
Operating margin was 38.1 percent, lower than 38.3 percent a year earlier. Net interest margin was 1.74 percent, compared to 2.07 percent in the preceding year.
During the quarter, the company repurchased about 2.5 million shares of its common stock for nearly $44.0 million, at an average price of $17.77 per share.
TD Ameritrade has also declared a quarterly cash dividend of $0.06 per share, to shareholders of record on July 31, payable on August 14.
AMTD closed Monday's regular trading at $16.4 on the NYSE. In the pre-market activity, the shares are up 1.1 percent.
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