Ameritrade Earnings Takeaways: Higher Interest Yields, Robust Trading Activity
TD Ameritrade (NASDAQ:AMTD) reported its fiscal second quarter earnings on Tuesday, April 19. Net revenues reported by the brokerage were up 5% year on year (y-o-y) to $846 million. A rise was seen in all revenue streams, but the primary contributor to the growth in revenues was higher net interest income, as the benefits of the Fed’s rate hike were accrued. In line with our expectations, asset based revenues rose by 4% y-o-y to $88 million. However, average fee based balances fell marginally owing to lower mutual fund balances, which reflects the pullback in the markets in January and February (though they recovered in March). In terms of trading activity, market volatility led to a significant rise in daily average trades in the quarter, driving trading revenues up 3% y-o-y to $360 million.
On the other hand, operating expenses were curtailed, falling slightly to $459 million. Consequently, net income increased by around 8% y-o-y, climbing up to $205 million in the March quarter.
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Have more questions about Ameritrade? See the links below:
- What’s Ameritrade’s Revenue And EBITDA Breakdown In Terms Of Operating Segments?
- How Has Ameritrade’s Revenue Composition Changed Over The Past 5 Years?
- How Has Ameritrade’s Revenue & EBITDA Changed In The Last Five Years?
- What Is Ameritrade’s Fundamental Value Based On Expected 2016 Results?
- How Is Ameritrade Expected To Grow In The Next Five Years?
- How Important Is Net Interest On Assets For Ameritrade?
- What Led To Mixed Results In Ameritrade’s Revenue And EBITDA Growth In 2015?
- Ameritrade’s Key Monthly Brokerage Metrics Witness Growth In February
Notes:
1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Ameritrade.
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