Source: The Canadian Press

Record trading activity during a volatile quarter helped lift TD Ameritrade Holding Corp.’s (Nasdaq:AMTD) fiscal third-quarter net income by 5% to beat expectations, the online brokerage said Tuesday.

During the volatile quarter, which included the historic May 6 “flash crash” when major stock markets plunged suddenly and then recovered, average client trades per day rose 6% to 413,000.

Omaha, Neb.-based TD Ameritrade said it added about 175,000 new accounts during the quarter, flat with a year ago, bringing its total to 7.9 million. Total client assets reached US$323.8 billion.

That was up 22% from US$265 billion a year ago, but down 5% from US$341.5 billion in the March quarter. That decrease reflected the fact that stocks had their worst quarterly performance since the financial crisis, including an 11.9% drop in the Standard & Poor’s 500 index and a 10% decline for the Dow Jones industrial average. Both indexes ended the period at lows for the year.

For the three months ended June 30, TD Ameritrade posted net income of $179.4 million, or 30 cents per share, up from US$170.5 million, or 30 cents per share, in the year-ago period. The company had 4% more shares outstanding in the most recent quarter, which trimmed earnings per share compared with last year.

Revenue jumped 13% to US$691.8 million, from US$613.8 million last year. Growth in asset-based revenue helped offset a slight decline in commissions and transaction fees. Discount brokers have been tamping down trading fees to attract more clients.

TD Bank Financial Group (TSX:TD), which owns 40% of Ameritrade, said the brokerage would contribute C$62 million to the Toronto-based bank’s net income in its fiscal third quarter.

Ameritrade’s results topped the average expectations of analysts polled by Thomson Reuters, who had expected profit of 28 cents per share, on revenue of US$682 million.

Beginning during the quarter and through July 2, the company repurchased 15 million of its common shares at an average price of US17.25 each. That completed its current stock buyback program.

Shares of TD Ameritrade fell 30 cents to US$15.52 in morning trading.