Online brokerage TD Ameritrade says growth in trading, client assets sent 3Q profit up 4 pct

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OMAHA, Nebraska — Online brokerage TD Ameritrade says its fiscal third-quarter profit rose roughly 4 percent thanks to strong trading and growth in client assets.

The Omaha, Nebraska-based company said Tuesday that it earned $197 million, or 36 cents per share, in the three months ended June 30. That's up slightly from last year's $190 million, or 34 cents per share.

TD Ameritrade's revenue also rose 4 percent to $794 million as the company handled an average of 433,759 trades per day and held $702.3 billion in client assets.

The analysts surveyed by FactSet expected earnings per share of 36 cents on $797 million revenue.

TD Ameritrade makes money from trading commissions and generates revenue from assets it holds for clients and fees for advice.

TD Ameritrade CEO Fred Tomczyk said he remains optimistic the company will deliver another solid year despite the hard to predict geopolitical environment.

The company predicts that its annual profit per share will be near the lower end of its predicted range between $1.45 and $1.70 per share because interest rates remain near zero.

Citi Research analyst William Katz maintained his "Neutral" rating on the stock because the growth in net new assets seems to be slowing and trading activity was softer than he expected in June.

Tomczyk said it seems likely that either the Federal Reserve will begin to increase interest rates or the Greek debt crisis will be resolved sometime in the near future, but it's hard to predict when those might happen or how the markets will react.

"We just make sure we're well positioned for whatever way the market is going to go," he said.

The current low interest rates limit Ameritrade's asset-based revenue, and those fees accounted for 57 percent of its revenue in the quarter. TD Ameritrade also makes money from trading commissions and fees for investment advice and education.

Tomczyk said he doesn't expect interest rates to increase soon, and when they do increase, he expects a long, gradual process.

Its shares fell 50 cents, or 1.3 percent, to $37.86 in midday trading Tuesday. Its shares have risen more than 21 percent over the past year.

Elements of this story were generated by Automated Insights ( using data from Zacks Investment Research. Access a Zacks stock report on AMTD at


Keywords: TD Ameritrade, Earnings Report

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