Recession takes toll on Ameritrade

Omaha-based online brokerage TD Ameritrade said today that fourth-quarter and full-year profits dropped in a recessionary environment that included struggling stock markets and interest rates near zero, but it had strong trading and account growth.

Net income for the quarter ended Sept. 30 was down 9 percent to $157 million, or 26 cents a share on $658 million in revenue, compared with $172 million or 29 cents a share on $650 million in revenue in the same period last year.

For the year, net income declined 20 percent to $644 million, or $1.10 per share on $2.4 billion in revenue, compared with $804 million or $1.33 per share on $2.5 billion in revenue in fiscal 2008, TD Ameritrade officials said.

However, average trades per day hit a record 372,000 for the year, a 23 percent increase over the previous year. In addition, company officials said clients opened 737,000 new accounts, an increase of 14 percent over 2008.

"We have leveraged our strong financial position and client-centric business model to deliver record organic growth, despite a very challenging market environment," said Fred Tomczyk, president and CEO.

Earnings for fiscal 2010 should be $1.10 to $1.40 a share, depending partly on interest rates, company officials said.

TD Ameritrade used 70 percent of its net income over the last year to repurchase more than $450 million in stock. It also acquired options trading and financial education leader thinkorswim GROUP Inc.

The company finished the year with more than $1 billion in cash equivalents.

Tomczyk said that for 2010 the company is considering additional acquisitions, share buybacks or paying a dividend.

"We are weighing all of our options and when we are ready to make a decision we will let people know," he said.

Contact the writer:

444-1117, joe.ruff@owh.com


Source:
          Omaha
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