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Ameritrade delivers upside surprise

Ameritrade (Nasdaq: AMTD) became the latest online broker to impress Wall Street with an upside surprise. The company said Tuesday it broke even in its fiscal fourth quarter, topping consensus estimates by 3 cents a share.

In Ameritrade's seasonally slow quarter, the company reported earnings of $286,000, or break even on a per share basis, on sales of $133.8 million. The results include losses from Ameritrade's OnMoney portal subsidiary. Earnings tracking firm First Call Corp. projected a loss of 3 cents a share.

Ameritrade's brokerage business raked in $17 million, or 10 cents a share, excluding OnMoney development costs. Ameritrade invested $78.1 million in OnMoney for the fiscal year. The online broker said OnMoney is key to growing its registered users and account growth. OnMoney and Ameritrade also announced an account aggregation deal Tuesday that will provide financial planning and cash management services.

In the fourth quarter a year ago, Ameritrade a loss of 4 cents a share, excluding charges, on sales of $74.5 million.

For the year, Ameritrade reported a net loss of $13.6 million, or 8 cents a share, on sales of $564 million. The loss includes costs related to OnMoney.

In a statement, Ameritrade touted a slew of metrics. Cost per trade in fiscal 2000 was $10.70, up 28 percent from 1999. In the fourth quarter, cost per trade was down 36 percent from a year ago. It cost $261 to acquire a new account in 2000, the company said. Ameritrade said it spent $188.3 million on advertising in 2000 with plans to spend $200 million in 2001.

Looking forward, Ameritrade said it plans to target financial planners and advisors with institutional services.

Ameritrade is the latest online broker to report impressive results. Rival E*Trade Group Inc. (Nasdaq: EGRP) bested analysts' expectations, pulling in a profit of $7.2 million, or 2 cents per share, for ongoing operations.


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