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

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

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.

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.