Online broker Ameritrade lowered its second-quarter and full-year outlook Friday, just one day after rival Charles Schwab issued a hiring freeze and slashed spending due to a marked decline in trading activity among its investors.
The Omaha, Neb.-based firm said it expects to post a net profit of 1 cent to 2 cents a share in the current quarter, and revenue of $132 million to $150 million. Wall Street analysts, on average, were expecting the company to earn 5 cents a share on revenue of $160.5 million, according to research firm Thomson Financial/First Call.
Separately, Ameritrade reported continued growth in its core online brokerage business, opening 28,000 new accounts in February for a total of 2,898,000 accounts, and an average of 100,000 trades a day. Competition has been heating up in the consolidating online brokerage industry, as companies are desperately trying to add new clients and retain existing ones in an effort to drive rivals out of business.