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Ameritrade accounts, earnings surge in 2Q

You may not be making a lot of money trading these days, but your online broker is doing pretty well. Fueled by strong trading volume, Ameritrade (Nasdaq: AMTD) easily topped estimates Thursday with fiscal second quarter earnings of $3.2 million, or 2 cents a share.

First Call consensus predicted a loss of 4 cents a share.

Ameritrade's results come a day after E*Trade (Nasdaq: EGRP) broke even on an operating basis. First Call was expecting E*Trade to report a hefty loss.

Ameritrade said revenue for the quarter ending March 31 surged to $170.3 million, compared to $63.7 million in the same quarter a year ago. The company added 319,000 new accounts in the quarter, up 47 percent sequentially.

The new accounts combined with more cost-effective advertising cut Ameritrade's cost per new account by 61 percent. Ameritrade's cost per new account was $172 in the second quarter, down from $438 in the first quarter.

The company also said trading volume surged 186 percent from a year ago. Ameritrade averaged 149,000 trades per day. In the second quarter, customer assets swelled to $38.9 billion from $19.5 billion a year ago, and $31.6 billion at the end of the first quarter.

In its earnings statement, Ameritrade said it has become more efficient across the board. The company cut its operating cost per trade to $8.54, a 39 percent decline from the prior quarter.

Ameritrade said it spent $54.8 million in a second quarter advertising, which yielded 319,000 new customers. Net income from ongoing operations, which includes advertising but excludes investments in OnMoney, Ameritrade's financial services portal, was $22.6 million, or 13 cents a share. This compares to net income from ongoing operations of $8.8 million, or a nickel a share, a year ago.

In addition to E*Trade, Ameritrade competes with TD Waterhouse (NYSE: TWE), Charles Schwab (NYSE: SCH), DLJ Direct (NYSE: DIR) and Datek Online.