Why Toronto-Dominion Bank Stock Flopped Today

Now is not an ideal time for a North American bank to whiff on its bottom-line estimate.

Now is not an ideal time for a North American bank to whiff on its bottom-line estimate.

What happened

Investors remain nervous about bank stocks in the wake of high-profile lender failures this year. As a result, they can take even a mild earnings miss hard when a bank reports underwhelming quarterly figures. That was the case with Canada-based lender Toronto-Dominion Bank (TD -4.39%) on Thursday. The company’s stock closed more than 4% lower, on a day when the S&P 500 enjoyed a rise of almost 1%.

So what

For its fiscal second quarter of 2023, Toronto-Dominion’s total revenue came in at 12.54 billion Canadian dollars ($9.25 billion), according to non-GAAP (adjusted) standards. That was comfortably above the CA$11.26 billion ($8.31 billion) the bank earned in the same quarter last year. It also topped the average $12.38 billion ($9.13 billion) analyst estimate. 

That was on the back of notable growth in total net loans, which rose by 11% year over year to hit nearly CA$850 million ($627 million). Growth in deposits was sluggish, however; it ticked up less than 1% to almost CA$1.19 billion ($878 million). 

As for Toronto-Dominion’s profitability, it too rose marginally. Adjusted net income landed at CA$3.75 billion ($2.77 billion), or CA$1.94 ($1.43) per share, up from the year-ago quarter’s CA$3.71 billion ($2.74 billion). Those prognosticators were collectively expecting the bank to do much better and post a net income of CA$2.10 ($1.55) per share.

Now what

Concurrent with the earnings announcement, Toronto-Dominion declared a fresh quarterly dividend. This is to be CA$0.96 ($0.71) per share, and it will be paid on or after July 31 to investors of record as of July 10. It also launched a new stock repurchase program, under which it will buy up to 30 million of its common shares. The program will be in force for one year.

Read this article on Motley Fool

Trading Signals

Get Free Daily Trading insight

Follow US:

StocksJar Is A Comprehensive Investing Tool And Social Trading Network For Private Investors And Day Traders To Help Them To Gain An Advantage Before Trading.

this website uses cookies

We use cookies to ensure you get the best experience on our website. To learn more about cookies, including how to control cookies please read our cookies policy.