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TD Ameritrade profit falls on softer trading

TD Ameritrade Holding Corp. (AMTD-Q) reported a lower quarterly profit in line with estimates as near-zero interest rates and low intraday volatility cut into the discount brokerage's income, and as expenses rose.

The company said on Tuesday it earned 25 cents US a share, or $136.7 million in its fiscal second quarter ended March 31. It earned 30 cents a share, or $171.7 million in the year-earlier period.

The Omaha-based company said revenue was $673.1 million, compared to $718.2 million a year earlier.

Analysts, on average, expected the company to report 25 cents a share on revenue of $672.1 million, according to Thomson Reuters I/B/E/S.

TD Ameritrade is the No. 1 U.S. discount broker by trading volume and its results are often seen as a proxy for the mood of Main Street investors. The company derives more than 40 percent of its annual revenue from trading fees and commissions.

Clients made an average of 387,571 trades per day in the quarter, down from 439,158 a year earlier. Commission and transaction fees fell to $292.1 million from $338.3 million.

Net interest revenue fell to $106.7 million from $121.6 million.

Operating expenses rose to $454 million from 435.3 million.

The company earned $209.2 million on fees from insured deposit accounts, up from $187.5 million a year earlier, while revenue from investment product fees rose to $46.2 million from $40.4 million.

TD Ameritrade said its clients added a net $10.8 billion in net new funds to their TD Ameritrade accounts in the quarter, for an annualized growth rate of 11 percent.

Total client assets rose 7 percent to $452.4 billion.

TD Ameritrade's largest shareholder is Toronto Dominion Bank, Canada's No. 2 lender, which holds a stake of around 45 percent in the company. TD Bank expects TD Ameritrade's fiscal second-quarter earnings to contribute about $47 million CDN toward its fiscal second-quarter income.

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