Ameritrade's Q4 Profit Rises on Stronger Fees

Online brokerage Ameritrade Holding Corp. (AMTD) on Tuesday reported sharply higher fiscal fourth-quarter profit, driven by stronger fees as trading continued to pick up.

Quarterly earnings rose to $96.5 million, or 23 cents per share, from $57.2 million, or 14 cents per share, last year. Revenue surged to $274.3 million from $186.8 million in the year-ago period.

The Omaha-based company surpassed Wall Street projections for earnings of 22 cents per share on revenue of $261.4 million, according to analysts surveyed by Thomson Financial.

Ameritrade said its acquisition of TD Waterhouse USA (search) from Canada's Toronto-Dominion Bank is expected to close by early 2006. The $2.9 billion deal makes Ameritrade one of the most formidable competitors to Charles Schwab Corp., the nation's largest discount brokerage.

The brokerage also said it is in talks with the Securities and Exchange Commission (search) regarding how it disclosed certain accounting transactions concerning its investment in Knight Capital Group Inc. Ameritrade said it believes the transactions were recorded correctly.

However, a change in accounting would result in increases of $5 million, or 1 cent per share, for 2005 profit; $10.5 million, or 2 cents per share, for 2004 profit; and a decrease of $28 million, or 7 cents per share, in 2003 profit. Any changes would not have an impact on reported net cash flows or total stockholders' equity, Ameritrade said.

Looking ahead, Ameritrade projects 2006 earnings between 83 cents and $1.02 per share. Analysts project earnings of 87 cents per share.

For 2005, the company reported full-year earnings of $334.8 million, or 81 cents per share, up from $272.3 million, or 64 cents per share, in its last fiscal year. Revenue rose to $1 billion from $880.1 million during the previous year. Analysts projected earnings of 80 cents per share on revenue of $986.3 million.

Shares of Ameritrade rose 8 cents to $21.20 on the Nasdaq Stock Market (search). The stock has traded in a 52-week range between $9.91 and $22.25.