Online broker

TD Ameritrade

(AMTD) - Get Report

reported a 36% gain in fourth-quarter profit, but revenue was below Wall Street expectations.

In the quarter, the Omaha-based brokerage earned $128 million, or 21 cents a share, compared to $94 million, or 23 cents a share, in the year-ago period. Revenue rose 78% to $488.7 million.

Ameritrade said it earned $156 million, or 25 cents a share, in operating income. The company defines operating income as "net income, adjusted to remove the after-tax effect of amortization of acquired intangible assets, interest on borrowings, fair value adjustments of investment-related derivative instruments and any unusual gains or charges."

The Thomson Financial consensus estimate had the firm earning 22 cents a share on revenue of $505 million. It's not clear whether the analyst estimate was based on the operating number or the net income figure.

Commission and transaction fees rose 26% to $163 million.

The firm's fourth-quarter revenue was bolstered by the merger with online broker TD Waterhouse. The merger also led to a big spike in expense, which more than doubled to $289 million.

Meanwhile, Ameritrade expanded its 2007 earnings guidance a bit. The firm now says it expects to earn between 98 cents a share and $1.22 a share. The earlier guidance had the firm earning between 99 cents a share and $1.21 a share.

The past week has been a rough one for shares of Ameritrade and other online brokers. Online brokerage stocks tumbled in the wake of Bank of America's decision to offer free stock trading to qualified customers. But many on Wall Street have said the selloff was overdone.