OMAHA, Neb. (AP) — Online brokerage TD Ameritrade says brisk stock trading in the first three months of the year lifted its quarterly profit 35 percent.
The Omaha, Neb.-based company said Wednesday that it generated $194 million in net income, or 35 cents per share, in its fiscal second quarter. That's up from $144 million, or 26 cents per share, last year. Revenue grew 20 percent to $812 million.
Analysts surveyed by FactSet expected TD Ameritrade Holding Corp. to report earnings per share of 34 cents on $800 million in revenue.
TD Ameritrade CEO Fred Tomczyk said the strong and volatile stock market at the start of 2014, combined with rising interest rates, boosted the company's results.
But he said trading already slowed in April to about 450,000 trades a day from the first quarter average of 492,000 trades per day. Many investors now want a clear signal the economy will continue improving.
"I expect the market to go sideways now until it's clear which direction the economy is going," Tomczyk said.
The biggest revenue growth came from transaction fees, which jumped 30 percent to $374 million.
TD Ameritrade's asset-based revenue also grew nearly 13 percent to $423 million as interest rates crept higher and the company attracted more client assets. At the end of the quarter, TD Ameritrade held $617 billion client assets — 19 percent more than last year.
Recent concerns about high-frequency trading have prompted more discussion about possible new market regulations. But Tomczyk said the U.S. equity market is already one of the most efficient in the world, so he doesn't think many changes are needed.
"The fact is that the retail investor has never had better access to the markets or better execution quality," Tomczyk said. "Ten years ago, 10-second executions were the norm. Now they happen in less than a second."
Tomczyk said regulators should carefully study the impact of any changes before proposing them.
TD Ameritrade Holding Corp.: www.amtd.com