Toronto-Dominion Bank misses profit expectations

Toronto-Dominion Bank posted an increase in fourth quarter profit but failed to meet analyst expectations because of credit losses and other expenses.

TD Bank reported fourth quarter net income of $1.746 billion (91 cents per share), an increase compared to $1.616 billion (84 cents per share) last year.

Adjusted profit rose to $1.862 billion (98 cents per share), from $1.815 billion (95 cents per share).

The company’s Canadian retail and wholesale segments performed better than last year, but operations in the US remained almost unchanged.

Despite TD’s profit being higher than last year it still did not meet analyst expectations of $1.05 per share of adjusted earnings and $1 per share of net income.

Revenue was well ahead of estimates, increasing by $452 million from last year to $7.452 billion.

TD Bank was subject to $54 million of integration charges this quarter which affected earnings by three cents per share. The company also increased its provision for credit losses up to $371 million.

Barclays analyst John Aiken wrote in a commentary:

“Almost everything that one does not want to see at TD came through in the quarter,”

“Considering we had anticipated that TD’s relative exposures would result in relatively more positive earnings than peers, the fourth quarter is a decidedly negative surprise. Given that we anticipate the market will share in our sentiment, we would expect the shares to be off sharply today.”

TD posted full 2014 year revenue of $29.96 billion, up $2.7 billion from 2013. Net income was $7.88 billion and adjusted profit was $8.12 billion.

“We are pleased to finish out the year with strong total adjusted earnings of $8.1 billion,” said Bharat Masrani, TD’s new president and chief executive officer. “Results for the year reflect good earnings from each of our businesses, driven by organic growth, strong fundamentals, and good results from recent acquisitions.”