TD Ameritrade profit dips but beats forecast

Associated Press Modified: July 17, 2012 at 5:00 pm •  Published: July 17, 2012
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OMAHA, Neb. (AP) — Online brokerage TD Ameritrade's net income slipped 2 percent as trading slowed in its fiscal third quarter, but the company beat Wall Street expectations because expenses were down and investors entrusted the firm with more money.

Ameritrade CEO Fred Tomczyk said Tuesday that the company's strategy is helping it weather the challenging conditions.

"Our balance sheet is strong, and we remain well positioned to deal with today's uncertain macroeconomic environment," he said.

But it doesn't appear likely that the economic worries or low interest rates will change anytime soon, so Tomczyk said the company will have to remain disciplined and patient.

"It's hard to see much changing until after the political election in the United States," Tomczyk said.

Ameritrade generates revenue from commissions it charges investors on trades and from asset-based fees and interest it gets on the assets it holds.

The Omaha-based company said its net income fell to $153.8 million, or 28 cents per share, in the quarter ended June 30. That's down from $157.4 million, or 27 cents per share, a year ago. It had 23,741 fewer shares outstanding this year.

On average, the analysts FactSet polled expected earnings of 26 cents per share.

Revenue declined nearly 3 percent to $667.3 million from $684.8 million last year. Analysts expected lower revenue of $659.8 million.

Its shares slipped 13 cents to close at $16.27 Tuesday. Its shares have recovered from a 52-week low of $13.34 in mid-September 2011. They peaked almost a year ago at $20.76.

Credit Suisse analyst Howard Chen said in a research note that Ameritrade has done a good job controlling its expenses, but he expects the economic challenges to get worse before they improve.

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