TD Ameritrade Earnings Increase by 40%

Brokers, Investing

TD Ameritrade announced a 40% increase in Q4 earnings as the online broker boosted its commissions and transactions fees and client trades increased. Revenue grew nearly 10% to $709 million. While the increased trading activity is certainly a positive sign, online brokerages in general have been mired in a 3-year slide in trading activity from individual investors due to a slow-moving economic recovery.Also, the current low interest rate environment limit Ameritrade’s asset-based revenue, but the company will benefit once interest rates rise.

Shares of TD Ameritrade remained relatively flat, as many analysts were disappointed at the decline in net interest margin during the quarter. Active client accounts rose 4% to 6 million in 2013. TD Ameritrade shareholders have realized a total return of more than 75% through dividends and stock price appreciation. The company said it plans to issue a special dividend of 50 cents a share in December, the second such dividend this year.

The total amount of client assets Ameritrade manages grew to $556 billion, up from $472 billion a year ago. The company handled an average of 381,657 trades per day during the quarter ended September 30, up from 328,280 last year.

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