AMTD TD Ameritrade Holding Corporation

By Chelsey Dulaney 

TD Ameritrade Holding Corp. on Wednesday reported better-than-expected profit in its first quarter, but revenue dipped slightly and investors remained cautious about trading in a volatile market.

Shares of TD fell 4.2% to $27.72 a share in late morning trading.

In all, for the fiscal first quarter ended Dec. 31, TD Ameritrade reported earnings of $212 million, up slightly from $211 million a year earlier. On a per-share basis, earnings were flat at 39 cents, above analysts' expectations of 36 cents, according to analysts polled by Thomson Reuters. Profit was helped by controlled expenses, which fell 1.3% from the prior year.

Revenue slipped slightly to $812 million from $819 million, but matched analysts' expectations.

The brokerage brought in $17 billion in net new client assets in the quarter, pushing total client assets to $695 billion.

In all for the period, TD's average daily trades slid 4.2% from a year earlier to 438,108. In an interview, Chief Executive Fred Tomczyk attributed the year-over-year decline to a tough comparison and "a much more sedate market" through the end of the 2015 calendar year.

Trading in the first few weeks of the new year has spiked amid broad-based market volatility, driven by concerns over China and sliding oil prices. Daily trades in January are averaging about 579,000, up about 30% from the first quarter.

The online brokerage said it expects the Federal Reserve's December decision to raise interest rates for the first time in nine years to drive growth this year.

The company said it expects higher rates to lift its revenue by $50 million to $80 million and earnings by 6 cents to 9 cents a share. Overall, it backed its forecasts for the year.

In the first quarter, TD Ameritrade said interest rate-sensitive assets, which include spread-based assets and money market mutual funds, grew 9% to a record $110 billion in the quarter. TD cited organic growth and changing investor sentiment in the volatile market environment.

"People are being much more tentative," said Mr. Tomczyk. "People are definitely taking a wait-and-see attitude."

Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com

(END) Dow Jones Newswires

January 20, 2016 12:05 ET (17:05 GMT)

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