TD Ameritrade Profit Rises

An acquisition gooses revenue.
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TD Ameritrade

(AMTD) - Get Report

said first-quarter earnings rose from a year ago due to higher trading volume and the acquisition of TD Waterhouse's retail business. The company raised its profit forecast for 2006 and lowered it for 2007.

TD Ameritrade's profit rose to $172.8 million, or 30 cents a share, in the quarter, from $77.4 million, or 19 cents a share, last year. Earnings in the latest quarter included a one-time gain of 8 cents a share from the sale of TD Ameritrade's investment in

Knight Capital

(NITE)

. Analysts surveyed by Thomson Financial were expecting earnings of 21 cents per share, which the company beat, excluding the gain.

With the acquisition of TD Waterhouse, revenue from commissions and clearing fees rose 74% to $221.4 million in the first quarter, while net interest revenue roughly doubled to $173.4 million. The company posted total revenue of $497.2 million, beating analysts' estimate of $481.76 million.

For all of 2006, TD Ameritrade now expects to earn about 94 cents a share, up from a midpoint of 91 cents a share offered previously. For 2007, the company sees earnings of $1.06 a share, down 9 cents from its previous outlook. On average, analysts are predicting earnings of 89 cents a share this year and $1.24 a share next year.

Meanwhile, total trades at the company increased 66% to 15.8 million from 9.5 million in the same quarter last year. Average client trades per day rose 52% to 254,382, and average commissions and clearing fees per trade rose 4.5% to $14.04 from $13.43.

"The TD Waterhouse deal is already accretive, and today we reach a milestone in our integration efforts as we launch our new value propositions and brand," said chief executive Joe Moglia.

The company also said Monday that it will offer flat-fee online equity trading at $9.99 per trade.