In the fourth quarter, the company reported net income of $114 million, or $0.20 per share, down from $157 million, or $0.26 per share, a year earlier. Revenue was $609 million, reflecting an 8% drop from the fourth quarter last year.
The average number of client trades fell 23% during the quarter to 317,684 trades per day, which helped the 31% decline in transaction-based revenue to just over $250 million.
"With interest rate sensitive assets at an all-time high of $66 billion, we believe that we have a significant earnings upside once rates rise," said executive vice president and chief financial officer, Bill Gerber.
According to Thomson Reuters, analysts expected earnings of $0.23 per share on revenue of $619.2 million on average.
However, the company's asset-based revenue increased during the period, which offset the slower trading environment due to low interest rates, it said. Asset-based revenue for the fourth quarter totalled $324 million, compared to $267.2 million a year earlier, as the company added net new assets of approximately $6.0 billion in the period.
The fourth quarter also saw the company initiate a $0.05 per share quarterly cash dividend, payable on December 15th.
"Over the last two years, TD Ameritrade has deployed or returned over 100 percent of our net income to our shareholders," Gerber continued.
TD Ameritrade said it expects earnings of $0.90 to $1.20 per share for its 2011 fiscal year. In 2010, the company made $592.2 million, or $1.00 per diluted share, versus $643.7 million, or $1.10 per share in 2009.
TD Bank Financial Group [TSX: TD], which owns 40% of TD Ameritrade, said the brokerage would contribute C$33 million to the bank's fourth quarter profits.
TD Ameritrade was down nearly 0.5% at $16.7 as of 11:31am ET on Tuesday.
Disclosure: No positions