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TD Ameritrade fiscal Q4'19 net income inches up

TD Ameritrade Holding Corp. posted non-GAAP net income for the fiscal fourth quarter of $575 million, or $1.05 per share, an increase from $523 million, or 92 cents per share, reported a year earlier.

The S&P Global Market Intelligence consensus normalized EPS estimate for the quarter was 97 cents.

The company's GAAP net income for the three-month period ended Sept. 30 was $551 million, or $1.00 per share, compared to $454 million, or 80 cents per share, in the fiscal fourth quarter of 2018. TD Bank Group expects TD Ameritrade's earnings for the quarter to translate into about C$301 million reported equity in net income of an investment in TD Ameritrade for its fiscal fourth-quarter results.

Average client trades per day rose to 837,009 for the quarter from 795,104 in the prior-year period. TD Ameritrade reported average client trades per day of 824,600 in the third fiscal quarter of 2019.

Net revenues for the quarter totaled $1.56 billion, up from $1.40 billion in the year-ago quarter. Total asset-based revenues were $1.01 billion, compared to $890 million a year earlier. Net interest revenue rose year over year to $413 million from $356 million.

TD Ameritrade posted revenues from commissions and transaction fees of $502 million in the quarter, up from $482 million in the fiscal fourth quarter of 2018. Net new assets were $22.0 billion, compared to $23.9 billion in the prior-year period.

The company continues to expect its decision to cut commissions for most trades to zero to reduce revenue by $220 million to $240 million per quarter going forward.

The changes to TD Ameritrade's pricing "represent near-term challenges for us," CFO Stephen Boyle said in a statement. "Earnings are expected to decline in the first quarter of fiscal year 2020, but with a stronger competitive position, we expect to see stronger organic growth."

The company is "working on new plans for profitable growth and will take measured strategic actions as needed," he added.

For fiscal year 2020, TD Ameritrade expects to report revenue between $4.9 billion and $5.3 billion. The company plans to raise its common stock dividend by 1 cent for fiscal 2020, to 31 cents per share.

For the full 2019 fiscal year, the company reported $2.30 billion, or $4.13 per share, in non-GAAP net income, up from $1.90 billion, or $3.34 per share, for fiscal year 2018.

The S&P Global Market Intelligence consensus normalized EPS estimate for the company's fiscal 2019 results was $4.05.