TD Ameritrade ( AMTD) sank 8% Tuesday after the online broker slashed earnings guidance, citing a drop-off in trading activity. Profit slumped 18% from the first quarter of last year to $141 million, or 23 cents a share. Revenue rose 5.5% from a year earlier, but dropped 2% from the fourth quarter to $524.7 million. Analysts were hoping the brokerage would earn 24 cents a share on revenue of $534 million, according to Thomson Financial. "It was not a good quarter," writes William Tanona, an analyst at Goldman Sachs. TD Ameritrade's "shortfall was driven by higher-than-anticipated expenses as well as modestly lower-than-estimated trading activity and commission rates." The Omaha firm also cut its earnings projections for the full year to a range between 92 cents and $1.08 a share. Previously, the company had said it expected this year's earnings to be around $1.10 a share. Average daily client trades dropped slightly from a year earlier to 253,631 trades. The average commission made per transaction also fell by 11%, to $12.49. "While asset-backed revenues remain more than 60%, we've adjusted our guidance to account for the impact of recent market volatility and lower activity rates," says Joe Moglia, TD Ameritrade's CEO. "We have also decided to increase investments in our client experience to position us for more growth in 2008."