Low interest rates are restricting TD Ameritrade's ( AMTD) revenue.

As a result, the company's third-quarter profit slid 17% to $170.5 million, or 30 cents a share, from $204.4 million, or 34 cents, in the year-ago period. Excluding unusual items, TD Ameritrade would have earned 33 cents per share.

These sluggish results still managed to beat analysts' forecasts of 29 cents a share, sending shares of the company up 6% to $18.75 in morning trading.

Revenue was off 2% to $613.8 million from $623.6 million last year.

Ameritrade says it handled an average of 391,506 trades a day in the quarter, up from 287,349 trades a day a year-ago period, which drove transaction-based revenue up 36% to $338.5 million.

But the Federal Reserve's interest-rate cuts resulted in a 28% decline in the company's asset-based revenue, which fell to $262.8 million.

On Monday, TD Ameritrade agreed to purchase $456 million in auction-rate securities from investors as part of a settlement with government investigators.

Looking forward, the company expects those buybacks to hurt its fourth-quarter earnings by about 5 to 10 cents a share. But in the long run it should not affect earnings, CFO Bill Gerber said in a statement.
Copyright 2009 TheStreet.com Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. AP contributed to this report.

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