Sunday, April 17, 2011

TD Ameritrade (NASDAQ: AMTD): Q2 Earnings Preview 2011

TD Ameritrade Holding Corporation (NASDAQ: AMTD), Canada's second-largest lender, is scheduled to release fiscal second-quarter earnings before the opening bell on Tuesday, January 18, 2011. Analysts, on average, expect the company to report earnings of 28 cents per share on revenue of $702.23 million. In the year-ago period, the company reported earnings of 23 cents per share on revenue of $635.43 million.

TD AMERITRADE Holding Corporation, through its subsidiaries, provides securities brokerage services and technology-based financial services in the United States. AMTD operates two principal business units: a Private Client division and an Institutional Client division. 

In the preceding fiscal first quarter, the Omaha, Nebraska based company's net income was  $145.04 million or 25 cents per share, compared with a profit of $136.24 million or 23 cents per share in the year-ago period. Net revenues rose to $656.19 million from $624.62 million in the year-ago quarter. Analysts, on average, expected the company to report earnings of 24 cents per share on revenue of $646.45 million.

TD Ameritrade has continued to grow clients' assets while increasing net new assets, partly by differentiating itself through its discount online business model

TD Ameritrade's traditional revenue base comes from the transaction-based fees it charges to clients for brokerage and clearing services. This business model has been successful for online brokers because operating costs remain low in the online brokerage industry. TD Ameritrade also generates revenue from the cash in its clients' accounts, by lending out this money to other clients through margin accounts, and to third-party borrowers through affiliate banks.

The company's stock currently trades at a forward P/E (fye Sep 30, 2012) of 15.79 and PEG ratio (5 yr expected) of 1.68. In terms of stock performance, AMTD shares have gained nearly 9% over the past year.

Full Disclosure: None.
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