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What's in the Cards for TD Ameritrade (AMTD) in Q4 Earnings?

Zacks Equity Research

TD Ameritrade Holding Corporation AMTD is scheduled to report fourth quarter and fiscal 2019 results, after market close on Oct 21. The company’s revenues and earnings are expected to have grown year over year.

This Omaha-based investment broker has an impressive earnings surprise history, having topped the Zacks Consensus Estimate in three of the trailing four quarters, the average beat being 5.7%.

It witnessed net interest margin expansion in third-quarter fiscal 2019, which led to higher revenues. Also, average client trades per day increased, indicating improvement in trading activity. However, elevated expenses posed a concern.

TD Ameritrade Holding Corporation Price and EPS Surprise

TD Ameritrade Holding Corporation Price and EPS Surprise

TD Ameritrade Holding Corporation price-eps-surprise | TD Ameritrade Holding Corporation Quote

Now let’s have a look at the factors that might have driven fiscal fourth-quarter earnings:

Muted interest revenues: Due to lower interest rates, margin pressure for TD Ameritrade might have increased in the quarter. Thus, its interest revenues are likely to have declined. However, higher year-over-year average interest earnings assets, as reported in monthly metrics report for the first two months of the quarter, are likely to have provided some support.

Client asset growth: TD Ameritrade’s monthly metrics report reflects rise in client assets for July and August on a year-over-year basis. Thus, despite a challenging operating backdrop in the to-be-reported quarter, the broker’s fee-based revenues are expected to have witnessed a modest improvement.

The Zacks Consensus Estimate for TD Ameritrade’s client assets of $1.35 billion suggests 3.7% rise from the year-ago reported number.

Higher expenses: TD Ameritrade’s expenses are likely to have increased during the quarter on account of ongoing investments in technology.

Earnings Whispers

Our quantitative model doesn’t conclusively predict an earnings beat for TD Ameritrade this time around. The combination of a positive Earnings ESP and a Zacks Rank #3 (Hold) or better increases the odds of an earnings beat, which is not the case here.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: Earnings ESP for TD Ameritrade is 0.00%.

Zacks Rank: The stock currently carries a Zacks Rank #5 (Strong Sell).

The Zacks Consensus Estimate for earnings for the quarter is 97 cents, which suggests improvement of 5.4% from the year-ago reported number. Also, the consensus estimate for sales of $1.47 billion indicates 5% growth.

Stocks That Warrant a Look

Huntington Bancshares Incorporated HBAN has an Earnings ESP of +0.60% and has a Zacks Rank of 3. It is slated to report quarterly results on Oct 24. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Earnings ESP for Cullen/Frost Bankers, Inc. CFR is +0.28% and it also carries a Zacks Rank of 3. The company is scheduled to report quarterly numbers on Oct 24.

The Earnings ESP for BancorpSouth Bank BXS is +2.61%, and it carries a Zacks Rank of 3. The company is scheduled to report quarterly numbers on Oct 21.

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Huntington Bancshares Incorporated (HBAN) : Free Stock Analysis Report
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TD Ameritrade Holding Corporation (AMTD) : Free Stock Analysis Report
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