Ameritrade ‘optimistic’ about 2010

Strong trading and account growth in the midst of a deep recession gives TD Ameritrade hope for greater profits when the economy turns around, company officials said Tuesday as they reported declines in fourth-quarter and year-end net income.

“We are cautiously optimistic about 2010,” said Bill Gerber, executive vice president and chief financial officer.

The economy appeared poised to make a comeback, though it was not out of the woods yet, he said.

TD Ameritrade’s net income for the quarter ended Sept. 30 was down 9 percent to $157 million, or 26 cents a share, on $658 million in revenue, compared with $172 million, or 29 cents a share, on $650 million in revenue in the same period last year.

For the year, net income declined 20 percent to $644 million, or $1.10 per share, on $2.4 billion in revenue, compared with $804 million, or $1.33 per share, on $2.5 billion in revenue in fiscal 2008, TD Ameritrade officials said.

However, average trades per day hit a record 372,000 for the year, a 23 percent increase over the previous year. In addition, company officials said clients opened 737,000 new accounts, an increase of 14 percent over 2008.

TD Ameritrade’s stock closed Tuesday at $19.27, down 21 cents.

President and CEO Fred Tomczyk said the company used its strong financial position and client-driven business model to deliver record organic growth, despite the worst recession since the Great Depression, interest rates near zero cutting into revenue obtained from assets being held and struggling stock markets.

An uptick in the economy and higher interest rates could be quickly leveraged into profits for TD Ameritrade, Gerber said. Depending on the state of the economy, the company forecast earnings for fiscal 2010 at between $1.10 and $1.40 a share.

TD Ameritrade used 70 percent of its net income over the last year to repurchase more than $450 million in stock. It also acquired options trading and financial education leader thinkorswim GROUP Inc.

The company finished the year with more than $1 billion in cash equivalents.

Tomczyk said that for 2010 the company is considering additional acquisitions, share buybacks or paying a dividend.

“We are weighing all of our options,’’ he said, “and when we are ready to make a decision we will let people know.”

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