An encouraging quarterly earnings report was the catalyst sending Toronto-Dominion Bank's (TD 3.34%) stock higher on Thursday. It closed the trading session up by more than 3%, while the S&P 500 (^GSPC -0.04%) index essentially flatlined.
A double beat for quarter No. 2
Toronto-Dominion's total non-GAAP (generally accepted accounting principles) adjusted revenue for its fiscal second quarter of 2025 was slightly over 15.1 billion Canadian dollars ($10.9 billion), up from the CA$13.8 billion ($9.9 billion) it earned in the same frame of 2024. That was on the back of growth in both net loans and total assets, which rose by nearly 1% and almost 5% year over year, respectively.
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Adjusted net income went in the other direction, slipping to a bit over CA$3.6 billion ($2.6 billion) from the year-ago profit of almost CA$3.8 billion ($2.7 billion). The former figure was CA$1.97 ($1.42) on a per-share basis.
Both headline fundamentals comfortably beat the consensus analyst estimates. On average, professional researchers tracking Toronto-Dominion's stock were expecting CA$13.6 billion ($9.8 billion) for revenue, and a per-share, adjusted net income figure of CA$1.83 ($1.32).
In terms of its activities, the bank's largest -- Canadian personal and commercial banking -- saw a net income decline of 4%; it attributed this to higher provisioning for credit losses and noninterest expenses. Those operations saw a 3% increase in revenue, however.
Meanwhile, Toronto-Dominion's U.S. retail banking unit saw its adjusted net income fall by 16% in U.S. dollar terms. The company said this was due mainly to higher governance and control expenditures.
American struggles
On a more positive note, Toronto-Dominion did well with its wealth management and insurance, and wholesale banking divisions -- reported net income growth for the pair was 14% and 16%, respectively. Wealth management benefited from strong inflows from institutional clients, while the latter notched a new record for revenue.
Although the twin beats were satisfying, I think investors should be concerned with the company's struggles in the U.S. market. This will be the part of its operations to keep a sharp eye on going forward.
