Trading Volume Boosts TD Ameritrade

The online brokerage saw profits jump 35% as client trades increased.
By Debra Borchardt ,

Brokerage

TD Ameritrade

(AMTD) - Get Report

on Thursday reported solid profit growth in its second fiscal quarter for 2008.

Ameritrade posted net income of $187 million, or 31 cents a share, a jump of 35% over the previous year's quarter of 23 cents. The results were in line with analyst's expectations, according to Thompson Financial.

"We are pleased to see continued client engagement and traction in client asset growth, given the difficult market environment," CEO Joe Moglia said in a company statement.

Average client trades per day increased 23% to approximately 312,000. Net new assets jumped a whopping 156% to roughly $7 billion, fee-based balances climbed 47% to $71 billion and spread-based asset balances of increased 7% to approximately $31 billion.

The Omaha-based company reaffirmed its outlook for the full-year, forecasting a midpoint profit of $1.32 a share.

"Management stated that they will see minimal impact from a

25 to 50 basis points cut in the fed funds rate, making it more resilient than some peers in the current environment," Goldman Sachs analyst William Tanona wrote on Wednesday. "

Ameritrade is also less dependent on trading activity today, which should help alleviate some pain should an economic slowdown negatively impact retail trading levels." The analyst has a "buy" rating and a six-month target price of $21.

Rival

Charles Schwab

(SCHW) - Get Report

reported a similar winning quarter earlier this week, when it

reported

first-quarter profit rose 12 percent and 240,000 new accounts.

Ameritrade stock was shedding 1% to $17.40 in recent trading.

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