Online brokerage TD Ameritrade's 1Q profit jumps 31 per cent on surge in trading at end of 2013

OMAHA, Neb. – A surge in trading activity at the end of 2013 helped online brokerage TD Ameritrade record a 31 per cent jump in its quarterly profit as the economy continued improving and Congress avoided another budget stalemate.

Company officials said stock market activity picked up in the last three months of last year as the outlook for the economy and the federal budget grew clearer. Investors also appreciated that the Federal Reserve held off on cutting its stimulus until December.

TD Ameritrade handled an average of 413,743 trades per day in the last three months of 2013, up from 334,035 per day in 2012. The S&P 500 gained 9.9 per cent in the last three months of the year, pushing the gains for the index to almost 30 per cent for the year.

“We feel good about how the year is shaping up. Virtually every metric we measure and manage is trending in the right direction,” TD Ameritrade President and CEO Fred Tomczyk said Tuesday.

Shares of the Omaha, Neb., based company rose $1.46, or 4.5 per cent, to $33.87 in afternoon trading.

TD Ameritrade reported net income of $192 million, or 35 cents per share, during the October-December quarter. That’s up from $147 million, or 27 cents per share, a year ago.

TD Ameritrade Holding Corp.’s fiscal first-quarter revenue rose nearly 16 per cent to $752 million revenue from last year’s $651 million.

Analysts surveyed by FactSet expected earnings per share of 33 cents on revenue of $736 million.

Citi analyst William Katz said Ameritrade delivered a strong quarter, and the company has momentum to continue growing profits this year because of client engagement and its strong record of attracting more client assets.

Ameritrade’s asset-based revenue rose to $407 million from $377 million last year. Trading fees jumped to $328 million from $257 million.

“Trading activity was at its highest level in more than two years. The trading and investing environment has definitely improved,” Tomczyk said.

TD Ameritrade clients have been logging into their accounts more often and are using mobile trading technology to trade stocks. Those trades sent from smartphones or tablet computers accounted for 12 per cent of Ameritrade’s activity in the quarter.

Tomczyk said he expects mobile trading to continue growing as tablets and smartphones continue replacing desktop computers. The growth in mobile trading during the quarter helped eliminate the normal lull in trading around the holidays.


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