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Ameritrade soars in 2Q
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April 14, 1999: 9:01 p.m. ET
Online broker racks up earnings twice what analysts expected amid huge growth
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NEW YORK (CNNfn) - Ameritrade Holding Corp. blew past analysts' second-quarter earnings estimates Wednesday, as the Internet-based broker rode a wave of investor interest in online trading.
The Omaha, Neb.-based company reported income of $8.1 million, or 14 cents per diluted share, in the quarter ended March 27, compared to a loss of $0.3 million, or break-even per share, in the same quarter last year.
Analysts polled by the earnings tracking firm First Call Corp. expected Ameritrade to post earnings of 7 cents a share during the quarter.
Second-quarter 1999 revenue soared 112 percent from a year ago to $63.7 million.
In after-hours trading, shares of Ameritrade (AMTD) rocketed up $7 to 155. The stock plunged 25-1/4 in the Wednesday session, along with many other Internet issues.
Shares of Ameritrade have exploded up in recent weeks on high hopes for profit growth.
Company executives said a surge in online trading and an ebullient mood among investors about stocks contributed to the strong results.
"The market has been terrific, and we are positioned beautifully to seize the opportunity," Joe Ricketts, Ameritrade's chairman and co-chief executive officer, said in a statement.
"The growth in customer numbers is the most important measure of our success," he added. The growth in our customer base provides us with a platform for continued success in the second half of the year."
Ameritrade added a record 82,000 new accounts during the quarter. That came even though the company and top rivals have faced a welter of operating glitches as online brokers deal with soaring growth.
Ricketts said Ameritrade began the third quarter with 428,000 core discount brokerage accounts.
One analyst, who applauded the growth in membership despite relatively lower costs for advertising, said he was taken off guard by the strong earnings report.
"We had revised our numbers up twice and they still beat them," said Bill Burnham, analyst at CS First Boston, hinting Ameritrade rivals may fare well too. "This is a strong indicator that E*Trade is going to perform well."
E*Trade Group (EGRP) is expected to report its quarterly earnings results Tuesday.
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Ameritrade
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