TD Ameritrade FY 2015 Profits Jump to $813m

TD Ameritrade (NYSE:AMTD) today reported net profits of $813 million for its 2015 fiscal year (FY) ended in September, up from $787 million for that of 2014. The company said in a statement that revenues for the period stood at a record $2.3 billion, a 4% annual increase.

Overall, the online broker booked strong metrics for both the full year and its final quarter, boasting a 10% annualized rise in new client assets, which totaled $667 billion at the end of the 12-month period.

Two years of robust growth

This is  for the online broker. Earnings before interest, taxes, depreciation and amortization (EBITDA) for the full year reached $1.5 billion and represented 47% of net revenues, and pretax profits stood at $1.3 billion, which was 40% of net revenues. In the final quarter of FY 2015, EBITDA constituted 49% of net revenues, at $405 million, and pretax profit stood at $347 million, representing 42% of net revenues.

Rising dividend

Earnings per share (EPS) for the full year were at $1.49, a 5% improvement on the year, and the figure for the fourth quarter was $0.40, up from $0.38 a year earlier. On this basis, TD Ameritrade will distribute a quarterly dividend of $0.17 apiece, up from $0.15 for the fourth quarter of FY 2014. The dividend is payable as of November 24.

The broker expects that continued momentum will be maintained in 2016

Commenting on the results, TD Ameritrade’s President and Chief Executive Officer Fred Tomczyk said that they reflected a continued momentum from 2014, with “strong trading and asset gathering” combining to help the company deliver to its shareholders continuously improving financial performance. Return on equity, on an annualized basis, stood at 17%.

Mr Tomczyk went on to note that the growth in new client assets in particular has marked its seventh consecutive year of substantial, double-digit growth, and pledged to keep this momentum going through 2016.

Growth has been remarkable not just in terms of financial results but also in the number of daily trades, especially in the last quarter of its FY 2015, when TD Ameritrade particularly benefited from renewed market volatility. Average daily trades in the period reached a record high of 479,000, at an activity rate of 7.3%. The activity rate for the full year stood at 7.1%

Naturally, given such results, the outlook for FY 2016 has been optimistic. The broker expects to generate EPS of between $1.45 and $1.75 next year.

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