said Tuesday that it had a profitable third quarter, despite a falloff in daily trading volume. The company also reiterated its new guidance for the fourth quarter and year and said the guidance holds even if trading volume keeps dropping.
"We're efficient enough that our trades per day could go down another third and we could still be profitable," said Joe Moglia, chief executive of Ameritrade, on a conference call before the market opened.
Ameritrade reported earnings of $5.8 million, or 3 cents a share, for its fiscal third quarter ended June 28. That compared with earnings of $100,000, or break-even on a per-share basis, in the year-earlier period.
Third-quarter net revenue fell 10.9%, to $100.3 million, from $112.6 million in the year-earlier period. Average trades per day fell 32.1%, to 74,000, from 109,000. However, commission per trades increased 28%.
Company officials said they decreased promotion and other costs and saw an increase in a variety of other income such as activity fees. Total operating expenses dropped to $76.3 million from $91.4 million. Moglia also said the rate of customer balances has been holding steady.
The numbers exclude Ameritrade's purchase of Datek Online for $1.3 billion in stock. The deal, which is pending regulatory approval, could be completed at the end of August or the beginning of September, Moglia said.
In June, Ameritrade cut its fourth-quarter guidance and said it expected earnings of 2 cents to 4 cents a share in the fiscal third quarter, and break-even to 3 cents a share in the fourth quarter. It broke even in both year-earlier quarters.
Ameritrade, which has nearly 2 million customers, depends on commission revenue from the buying and selling activity of retail investors, who have put the brakes on trading amid wrenching market declines. Ameritrade added about 69,000 new brokerage accounts in the period and processed an average of 74,000 trades per day, down from 109,000 last year.