Two discount brokerages, Schwab ( SCH) and Ameritrade ( AMTD), reported solid quarterly results Tuesday, driven by higher interest income and stabilizing client activity.

Schwab earned $53 million, or 4 cents a share, in its fourth quarter, compared with earnings of $148 million, or 11 cents a share, last year. Excluding various charges, the company earned $164 million, or 12 cents a share, in the latest quarter, a penny better than estimates.

Total client assets were $1.081 trillion at year end, up 12% from December 2003, while new accounts rose 37% from last year to 56,000 in December.

"The securities markets improved and client activity picked up during the fourth quarter of 2004, helping the company to achieve its seventh consecutive quarter of growth in non-trading revenues," Schwab said.

Ameritrade's first-quarter earnings jumped 29% from a year ago, as 2004's Fed tightening drove a big jump in interest revenue.

The online brokerage earned $92.6 million, or 22 cents a share, in the three months to Dec. 31, up from $71.9 million, or 17 cents a share, last year. Net revenue was $262.0 million in the latest quarter compared with $226.4 million last year.

Analysts had been forecasting earnings of 19 cents a share on revenue of $248.5 million in the latest quarter. For all of 2005, Ameritrade now sees earnings of 77 cents to 90 cents a share, above the Thomson First Call estimate of 74 cents a share.

For the December quarter, Ameritrade said average client trades fell 10% from last year to 171,000 a day, while return on equity was 28% annualized, up from 24% a year ago.

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