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Ameritrade's Datek Buy Helps Boost Earnings

But average daily trades continue to contract.
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(AMTD) - Get TD Ameritrade Holding Corporation Report

acquisition of Datek Online last fall helped boost profits and revenue in the latest quarter, the company said Tuesday.

Shares in the online broker rose 2.6% to $5.13, after the company announced second-quarter earnings of $9.6 million, or 2 cents a share, which is up from the year-ago $1.9 million, or 1 cent a share.

While the earnings are nowhere near the profit of 3 cents to 5 cents the company originally expected in January, it was good enough to match Wall Street estimates that were lowered after Ameritrade warned on March 14.

Revenue came in at $147.6 million, up 38% from the year-ago $106.7 million. With the average daily number of trades in the second quarter coming in at 116,000, down 18% from the first quarter, commissions and fees boosted earnings. All told, fees for clearing trades and other commissions jumped by 45% over last year, with the company adding 83,000 new accounts in the second quarter, bringing Ameritrade's total to nearly 3 million.

Ameritrade credited its $1.3 billion acquisition of Datek Online, finalized in September 2002, as one of the reasons behind the boost in earnings and revenue, telling investors that it's capitalizing from synergies. Of note was the fact the company reached a milestone of integration, called the clearing conversion, in consolidating Datek and Ameritrade customers onto a single platform.

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"Further, we attained the targeted merger synergy run-rate of $100 million after tax and expect additional synergies to be realized from the clearing and Web site conversions over the next two quarters," said CEO Joe Moglia.

Ameritrade also announced that it was buying 20,000 accounts from, a unit of

SWS Group


, for between $3 million and $5 million.

Going forward, in a conference call with analysts, Moglia said that the company would continue to examine the competitive landscape for potential mergers as a way to help grow its business.

"It's something we look at literally every day," he said.