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By John McCrank
January 17, 2012 5:35 PM EST
TD Ameritrade Holding Corp
The discount brokerage and financial services company reaffirmed its outlook for fiscal 2012, ending September 30, of $1.00 to $1.35 in earnings per share, but warned that, if the soft rate and trading environment persists, it could end up at the bottom of that range.
TD Ameritrade shares ended Tuesday down 1.78 percent at $16.01 in New York.
BMO Capital Markets analysts David Chiaverini lowered his full-year earnings estimate for TD Ameritrade to $1.05 from $1.15 following the earnings announcement.
TD Ameritrade's clients made around 318,000 trades a day in December, which was the slowest trading month for the firm since
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September 2010. Trading has picked up so far in January, but only slightly, to around 345,000 trades a day.
"We would like to be running around 400,000 trades a day, so it's definitely off," Fred Tomczyk, chief executive of TD Ameritrade, said in an interview.
TD Ameritrade is the No. 1 U.S. discount broker by trading volume and its results are often seen as a proxy for the mood of Main Street investors. The company derives more than 40 percent of its annual revenue from trading fees and commissions.
Tomczyk said investors seem reluctant to enter the market following a bumpy year in which equities ultimately ended flat, but fluctuated greatly depending on the headlines coming out of Europe on any given day.
EARNINGS UP, REVENUES MISS EXPECTATIONS
The Omaha, Nebraska-based company earned $152 million, or 27 cents a diluted share, in its fiscal first quarter, ended December 31, up from $145 million, or 25 cents a share, a year earlier.
Analysts had been expecting earnings of 26 cents a diluted share. The company said the beat was due to a lower tax rate in the quarter that added about 1 cent a share to its earnings.
TD Ameritrade said its clients added a net $10.2 billion in new funds to their TD Ameritrade accounts in the quarter, for an annualized growth rate of 11 percent.
Total client assets rose 9 percent to $406.3 billion. Interest rate-sensitive assets rose 16 percent to $79 billion.
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