TD Ameritrade Says 4Q Profit Fell 9 Pct

TD Ameritrade President & CEO Fredric J. Tomczyk, third left, is accompanied by colleagues and...

TD Ameritrade President & CEO Fredric J. Tomczyk, third left, is accompanied by colleagues and Nasdaq Executive Vice President Bruce Aust, second from right, during opening bell ceremonies in New York, Tuesday, Oct. 27, 2009. Online brokerage TD Ameritrade Holding Corp. said Tuesday its fiscal fourth-quarter profit fell 9 percent as its expenses rose while low interest rates limited its revenue growth. (AP Photo/Richard Drew)

(AP)

TD Ameritrade Holding Corp. said Tuesday investors kept its online trading operations busy in its latest quarter as the markets improved but lower interest rates and rising expenses sent its profit down 9 percent compared with a year ago.

Ameritrade said it handled 35 percent more trades per day on average and its trading-based revenue soared almost 38 percent in its fourth fiscal quarter.

The company's acquisition earlier this year of options-trading specialist thinkorswim helped it top trading numbers from last fall's panicked selling during the turmoil around the bankruptcy of Lehman Brothers. And retail traders stayed engaged in the improving market.

The average number of trades it handled soared to an average of 410,576 trades per day in the quarter.

But Ameritrade said low interest rates drove its asset-based revenue, which includes money earned on its customers' deposit accounts and various investment products, down 29 percent. The net effect was a slim 1 percent increase in overall revenue.

It said higher expenses — mostly associated with the thinkorswim acquisition — also hurt its profit.

Ameritrade earned $156.7 million, or 26 cents per share, in the quarter that ended Sept. 30, down from $172 million, or 29 cents per share, a year ago. Revenue edged up to $657.9 million from $649.2 million a year ago.

Analysts surveyed by Thomson Reuters expected earnings of 22 cents a share on $630.48 million in revenue.

Its shares slipped 21 cents, or 1.1 percent, to close at $19.27 Tuesday. Its shares are still closer to the high end of their 52-week range of $9.34 to $20.93.

Over the past year, Ameritrade has tried to limit its costs, boosted advertising to attract more business and acquired thinkorswim.

"We couldn't control the markets and we couldn't control interest rates, so we focused on the things we could control," said Fred Tomczyk, Ameritrade's CEO and president.