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Ameritrade, Knight earnings slump

2 min read
A volatile Nasdaq and bear market crimped Ameritrade's (Nasdaq: AMTD) and Knight's (Nasdaq: NITE) earnings Wednesday.

Shares of the online brokerage Ameritrade rose 0.38 to 10.19 while Knight, which saw a 44 percent drop in fourth quarter profit, also moved up 0.38 to 20 in pre-session trading on the Island ECN electronic trading network.

Both companies blamed their sluggish results on the recent Nasdaq slump along with the steep drop in technology shares. During the quarter, the tech-laden Nasdaq fell 33 percent. Online brokerages, which rely on transactions and active traders, have been particularly vulnerable to the market slump.

Ameritrade posted a first quarter loss of $23 million, or 13 cents a share, for its fiscal first quarter, ended Dec. 31, on revenue of $130 million. The numbers met reduced analyst estimates of a loss of 13 cents a share. The company warned for the period earlier this month.

Pro forma loss increased from the $21.7 million, or 12 cent a share, loss registered in the year ago quarter, while revenues rose from the $114 million reported in that period.

The story was much the same with Knight.

The company, which also cut its quarterly targets, earned $35.3 million, or 28 cents a share, in its fourth quarter on revenues of $251.3 million. First Call's lowered analyst consensus figure was for earnings of 22 cents a share.

For the year-ago period, net income was well off the $62.6 million, or 49 cents a share, recorded in fourth quarter last year. Revenues were also down compared $281.7 million taken in a year ago.

"We believe that the market correction kept many self-directed individual investors on the sidelines or in larger cap, defensive stock issues throughout the fourth quarter," said Knight CEO Kenneth Pasternak.

On the positive side, trading volume for both companies was up in the period.

Ameritrade said it processed 110,000 trades a day on average during the latest quarter, up from 81,000 a year earlier and a slight jump sequentially from 105,540 in the fiscal fourth quarter.

Knight reported an average of about 539,000 trades per day in the quarter, up from an average of 470,000 last year and higher sequentially from the nearly 499,000 trades per day in the third quarter.