TD Waterhouse on target with 4Q earnings

Jan. 2, 2002 4:43 p.m. PT

2 min read

TD Waterhouse Group, Inc. (NYSE: TWE) posted fourth quarter earnings of 6 cents a share, in line with First Call's consensus estimate. The company also said online trading now accounts for 68 percent of total trades, up from 51 percent in the fourth quarter of 1998.

Shares in TD Waterhouse, a full service online broker, closed at 19 3/8 Wednesday. The stock recently got a boost, along with that of Ameritrade Holding Corp. (Nasdaq: AMTD) and Charles Schwab & Co., (NYSE: SCH). Those three companies announced plans to improve investors' access to IPOs. TD Waterhouse has moved in tandem with the score of other online brokers which have rebounded with trading volume.

TD said that earnings and revenue grew, despite a slight decline in trading volume compared to the last quarter. Earnings of 6 cents a share compare to 4 cents a share last year. On a goodwill-adjusted basis earnings per share are 8 cents a share. The company also reported that net income of $21 million was up 45 percent from the fourth quarter of fiscal 1998, but down 21 percent from third quarter 1999 due to a $9.5 million increase in marketing costs.

Revenue was up by 49 percent year-over-year, to $253 million. Customer assets reach nearly $122 billion, up by 60 percent year-over-year and 8 percent from the last quarter.

Trading volume averaged 103,500 trades per day, up 57 percent over last year, but down 5 percent from the third quarter. Active customer accounts now exceed 2.1 million. TD's total number of online trading accounts now exceeds 1.1 million with a growth of 10 percent in the quarter.

TD is forging ahead with plans to enhance its online services. It has expanded its TalkBroker voice recognition system in Canada to include trading capabilities and introduced services in Australia. It has also entered a deal with Nokia to develop mobile trading with a specialized wireless phone. This service should be available on the Nokia 7100 Media series handsets during the first half of next year in the U.S. and in certain international markets.

TD Waterhouse also built its global presence during the quarter, one of many strategies it says are targeted at improving shareholder value. In the U.K., TD acquired YorkSHARE, a discount broker with 120,000 customer accounts, for $15.67 million. The purchase will double TD's market share in the U.K. In India, TD has entered a joint venture with Tata Financial Securities Ltd. to pursue online brokerage opportunities.