TD's 2012 results more like a field goal

Net earnings down, but assets at record level; upping dividend as well

Oct 30, 2012 @ 9:42 am

By Dan Jamieson

TD Ameritrade
+ Zoom
((Photo: Bloomberg News))

Getting the jump on hurricane Sandy, TD Ameritrade Holding Corp. released its fiscal year earnings late Monday — a day earlier than planned — so shareholders and analysts could get the information.

The news probably could have kept. Sluggish trading activity and low interest rates continue to bedevil the company, which saw declines in both commission revenues and net interest income. Total net income for the fiscal year ended September 30 was off 8.2% to $586 million. Fourth quarter net revenue dropped 13% to $143 million.

For the year, net revenue fell 4.4% to $2.64 billion. Net revenue was down more than 8% for the quarter.

TD does continue to build up assets, however. Net new assets for the fiscal year came in at $40.8 billion, about equal to the $41.5 billion brought in during fiscal 2011.

Total assets now stand at a record $472 billion.

TD Ameritrade does not break out results for its RIA custody business. But about 40% of the total assets, or $180 billion, comes from clients of the 4,400 independent advisers who custody at the firm.

In another positive sign, the company increased its quarterly dividend 50%, to $0.09 per share, payable to holders of record on Nov. 9, 2012.

“Our financial position and cash flow remain healthy, providing us with the continued flexibility to return capital to our shareholders while investing in future growth,” said chief executive Fred Tomczyk in a statement.

TD executives were not available for comment, and rescheduled interviews to Nov. 5, due to the storm.

At an earlier adviser event on Oct. 23, Mr. Tomczyk told InvestmentNews that the low interest rate environment could continue for two or more years — until the markets saw more clarity from the European situation and businesses got more certainty from political leaders, thus sparking a business-led recovery.

'One of my favorite sayings is “The misery of certainty is better than the misery of uncertainty,'” he said. “If you give business people certainty, they will adjust.”

Mr. Tomczyk told attendees at the event that an economic turnaround could come faster than expected once businesses begin to invest their large cash hoards.

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