TD Ameritrade 2Q Profit Narrows by 20% as Fees Decline

By Features FOXBusiness

TD Ameritrade (AMTD) revealed a 20% drop in second-quarter profit on Tuesday, as a decline in fees and average trading volume stifled revenue growth.

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The company reported net income of $137 million, or 25 cents a share, compared with a year-earlier $172 million, or 30 cents, matching average analyst estimates in a Thomson Reuters poll.

Revenue for the three months ended March 31 was $673 million, down from $718 million a year ago, just ahead of the Street’s $672 million view.

Growth of net new assets slowed to $10.8 billion during the period from $11.5 billion a year ago. Average trades a day were 388,000, down from $439,000 a year ago, despite growing from the sequential period.

“TD Ameritrade had a solid quarter, growing net revenues sequentially despite a difficult operating environment that included continued near-zero interest rates and low intraday volatility,” the company’s chief financial officer, Bill Gerber, said in a statement.

The online trading platform’s net interest margin stabilized during the quarter and Gerber says the company remains focused on “diligently managing” Ameritrade’s expense levels.

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The recent improvement from the company's first quarter reflects a rebounding economy that has gradually started to draw back investors that had temporarily exited the market under harsher conditions. That, in turn, has given a boost in recent months to e-broker trading volume.