UPDATE 2-TD Ameritrade Q1 profit falls, even as assets soar

Tue Jan 22, 2013 12:20pm EST
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By Jed Horowitz

Jan 22 (Reuters) - Quarterly profit at TD Ameritrade Holding Corp fell 3.3 percent from a year earlier on low interest margins and weak trading volume, but beat expectations as the firm collected a record amount of new client assets.

TD Ameritrade, the biggest online broker by customer trading volume, on Tuesday reported fiscal first-quarter profit of $147 million, or 27 cents a share, down from $152 million, or 27 cents, a year earlier.

The consensus estimate of 21 analysts compiled by Thomson Reuters I/B/E/S was for 24 cents a share in the most recent period.

Shares of TD Ameritrade climbed 3.5 percent to $19.10 on Tuesday.

The better-than-expected report reflected strong expense controls, torrid asset gathering and higher commissions per trade, company executives said. Trading remained sluggish, however, and net interest profit continued to be crushed by low interest rates, they said.

TD Ameritrade, which declared a special dividend of 50 cents a share last month, continued to struggle against low interest rates that have hurt its ability to book gains on clients' dormant cash, its executives said.

Like other discount brokerages, it has been forced to waive money-market fees worth hundreds of millions of dollars annually to ensure that clients do not realize negative returns.   Continued...