OMAHA, Neb. — Online brokerage TD Ameritrade Holding Corp. says strong growth in client assets helped lift its fiscal second-quarter net income 5 percent despite slower trading.
The Omaha, Neb., company said Tuesday that profit came to $144 million, or 26 cents per share, in the quarter that ended March 31. That matches analyst estimates and is up from $137 million, or 25 cents per share, in the previous year.
Revenue grew nearly 1 percent, to $679 million from $673 million. The company’s revenue from asset-based fees and fees for investment advice rose enough to offset a decline in trading revenue.
Analysts surveyed by FactSet expected revenue of $677.1 million.
Shares lost 19 cents, or 1 percent, to $19.25 in morning trading.
Nomura analyst Keith Murray said Ameritrade posted solid results, but it will be hard for the company to improve its profits much until interest rates increase and trading activity picks up.
Ameritrade reported net new client assets of $13 billion in the quarter, and its total client assets grew 7 percent during the period to $516.8 billion. That helped the company increase its asset-based revenue to $376 million from last year’s $362 million.
But the current low interest rates are limiting how much Ameritrade can make on those asset-based fees.
The company said it handled an average of 378,096 trades per day in the quarter, down from last year’s average of 387,571 trades.
“While retail investor sentiment has improved, a large number of investors remain cautious in this environment,” Ameritrade President and CEO Fred Tomczyk said.
But he said Monday’s big drops in commodity prices and investor concerns about the health of China’s economy showed how quickly trading activity can spike. Ameritrade handled more than 500,000 trades on Monday.
Ameritrade said it would maintain its 9 cents per share dividend in the quarter as it works to reduce its debt.
Company officials said stock repurchases will continue to be limited because buying significant blocks of stock would push its largest shareholder, TD Bank, over its current 45 percent ownership limit.