E-Trade, TD Ameritrade report customers kept trading in 1Q

TD Ameritrade on Thursday reported a profit of $186.7 million for the January-March period, a 32 percent leap from the first quarter last year. At 31 cents per share, profit matched analysts' expectations, according to a Thomson Financial survey. The company affirmed its profit target for the year, predicting earnings per share of $1.32.

Like its rival E-Trade, TD Ameritrade runs a discount brokerage enabling retail customers to trade stocks and establish investment accounts.

Clients entrusted an additional $7 billion to the Omaha, Neb.-based company during the quarter, bringing clients' assets to $306 billion. Trading volume surged 23 percent to an average of 312,000 trades a day on average, fueling higher revenue from commissions.

Revenue climbed 19 percent to $622.9 million.

E-Trade did not fare as well. The New York-based company posted a loss of $91.2 million and has lost $1.8 billion in the past six months. The first-quarter loss of 20 cents per share was double the loss analysts expected.

However, E-Trade's travails are a symptom of the company's balance sheet, not its core business of executing trades and managing investments for customers.

E-Trade reported its results after markets closed. Its shares rose 43 cents, or 11.9 percent, in after-hours trading after gaining 29 cents to $3.62 in the regular session.

Ever since E-Trade sold a $3 billion book of risky mortgage investments at less than 30 cents on the dollar, the beleaguered company has been attempting to repair its finances. E-Trade expects to lose as much as $1.5 billion on a portfolio of home equity loans, and the company's stock has surrendered three-quarters of its value in the past six months.

E-Trade set aside $234 million to cover bad mortgage loans in the first quarter, pushing total revenue down to $316.2 million from $645 million last year.