TD Ameritrade 4Q Profit Up, Scottrade Deal Ahead of Plan

TD Ameritrade’s fourth-quarter profit grew 14 percent, and the online brokerage offered an optimistic outlook for profits after its acquisition of rival broker Scottrade.

The Omaha, Nebraska, company on Tuesday posted earnings of $211 million, or 39 cents per share. That’s up from $185 million, or 35 cents per share, a year ago.

Earnings, adjusted for costs related to its acquisition of Scottrade, were 49 cents per share. That’s 3 cents better than Wall Street had anticipated, according to a survey by Zacks Investment Research.

TD Ameritrade now expects to book more of the cost savings that come with the acquisition of Scottrade, but the total cost savings will remain around $450 million. The company expects to maintain a network of 364 branches after Scottrade is fully integrated next year, down from its initial plan for about 450 branches.

The smaller number of branches won’t significantly reduce costs because most of the people who worked at those offices will move to other branches, and TD Ameritrade plans to add staff at its call centers.

About 1,700 Scottrade jobs will be eliminated in St. Louis, but about 1,000 others will remain there. Scottrade users will have to switch to TD Ameritrade trading platforms next spring.

The online brokerage posted quarterly revenue of $983 million, much better than the projections of $965.4 million from industry analysts, according to Zacks.

“We have good momentum right now and remain focused on delivering a successful integration, which we expect will drive incremental shareholder value,” said Steve Boyle, chief financial officer. “Our game plan is sound, and we expect to deliver better results than we originally modeled.”

For the year, the company reported profit of $872 million, or $1.64, per share. Revenue was $3.68 billion.

TD Ameritrade expects full-year earnings excluding acquisition costs in the range of $2.10 to $2.50 per share. With those costs, it predicts earnings between $1.50 and $2 per share.

Analysts surveyed by FactSet expected earnings per share of $2.14 without acquisition costs next year.

Citi analyst William Katz said there was little to criticize in TD Ameritrade’s results with a solid fourth-quarter and an outlook that exceeds what Wall Street expected.

TD Ameritrade shares have increased 10 percent since the beginning of the year. The stock has risen 30 percent in the last 12 months.