January 22, 2013 / 1:22 PM / 5 years ago

TD Ameritrade Q1 profit falls but assets soar

Jan 22 (Reuters) - TD Ameritrade Holding Corp said quarterly net income fell 3.4 percent from a year earlier but beat analysts’ expectations on record new assets from clients.

TD Amertrade, the biggest online broker by customer trading volume, reported profit of $147 million, or 27 cents a share, for its fiscal first quarter ended Dec. 31, 2012. The consensus estimate of 21 analysts compiled by Thomson Reuters I/B/E/S was 24 cents a share.

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

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.

TD Ameritrade remained more reliant on commissions and other investments from active traders than rivals such as Charles Schwab Corp and E*Trade Financial Corp.

TD Ameritrade said the quarterly client activity rate, a measure of how many active accounts were trading, fell to 5.8 percent from 6.5 percent a year earlier but was up slightly from the fiscal fourth quarter.

Despite sluggish trading volume industrywide, the company in October said it expects fiscal 2013 earnings to generally beat analysts’ expectations.

The brokerage has expanded into options trading and fee-based accounts to supplement its market-sensitive commission businesses. It gathered a record $15.6 billion in new client assets in the last three months of the year, up from about $10 billion in the year-earlier quarter.

TD Ameritrade ended 2012 with $472.3 billion in client assets, up 7 percent from a year earlier.

Rival Charles Schwab Corp earlier this month also reported record asset gathering at the end of 2012.

Shares of TD Ameritrade are up 13.3 percent in the past 52 weeks, including reinvested dividends, and have ranged between $15.09 and $20.59. They closed Friday on the New York Stock Exchange at $18.45, up 1.4 percent. U.S. markets were closed the Martin Luther King Jr. U.S. holiday on Monday.

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