Updated from 11:15 a.m. EDT

Though Ameritrade's trading-savvy punk "Stuart" may be helping rotund executives make some extra money on the side, Stuart's employer is spending more than four times as much for his services.

Ameritrade

(AMTD) - Get Report

said Thursday that it spent 316% more on its online trading advertisements featuring Stuart. It also reported that it had earned 60% less in its second fiscal quarter than it did a year earlier.

But the advertising spending appears to have paid off. Ameritrade's profit surprised Wall Street, which had been expecting a loss. But after rallying at the opening, reaching a session high of 19 3/4, Ameritrade's stock was down 1/4, or 1%, at 18 1/4 around midday Thursday. (Ameritrade finished Thursday trading down 1 1/16, or 5.7%, at 17 7/16.)

The online brokerage firm said it earned $3.2 million, or 2 cents a diluted share, down from $8.1 million, or 5 cents a share, in the year-earlier fiscal second quarter. Analysts had forecast a loss of 4 cents a share for the latest quarter, according to a survey from

First Call/Thomson Financial

.

Even though Ameritrade's advertising expenditure is less than a third of the budget of its media-splurging rival

E*Trade

(EGRP)

, which spent $177.5 million in the same quarter, the Omaha-based company did spend $54.8 million in the quarter, compared with $13.2 million a year earlier.

Ameritrade attracted 319,000 new customers in the first quarter to a total of 1 million customers. This pushed up net revenue by 167% to $170.3 million from $63.7 million in the second quarter of 1999.

"What the online brokers are doing is a land grab and everybody's spending," said Richard Repetto, an analyst at

Lehman Brothers

who rates Ameritrade an outperform. "If you don't spend, it's a detriment to the company and the accounts will dry up." Lehman has done no recent underwriting for the company.

Lehman's forecast for fiscal 2000, Repetto said, is to spend $200 million on marketing. He called Ameritrade's quarterly results "very strong."

"Cost per new account was really impressive at $172 vs. our forecast of $210," said William Wong an analyst at

Josephthal & Co.

who rates Ameritrade a buy. Wong expects the company will earn 22 cents this year. Josephthal hasn't done any underwriting for Ameritrade.

Tom Lewis, co-chief executive of Ameritrade, said in a statement that the company had one of the best operating margins in the industry, which puts it in a position for "continued rapid expansion."

Operating margins jumped 235%, to $90.1 million, excluding advertising costs and Ameritrade's $19 million after-tax investment in OnMoney, an online portfolio consolidator.

Revenues from transactions for all online brokers, however, will fall if the

Nasdaq

continues its bear run. "If volatility continues, investors will participate in the market, but if we go in to a protracted downfall we'll see investors step to the sidelines," Wong said.