Ameritrade Slides on Lowered Outlook

Ameritrade (Nasdaq: AMTD) was trading at US$7.50, down 44 cents, Friday morning after the online brokerage lowered its revenue projections for the current quarter and the year.

In an outlook posted on its Web site, Ameritrade said that revenue is likely to total $107 million to $126 million in the second quarter ending this month, down from $130.7 million in the first quarter and below management's previous projection of $115 million to $138 million.

For fiscal 2001 as a whole (ending September 29th), Ameritrade predicted revenue of $470 million to $600 million. In January, the company said it expected revenue of $570 million to $650 million for the year.

The repurchase of $152.4 million of convertible subordinated notes for stock and cash will result in an aftertax cost of about $39 million in the second quarter ending March 30th, Ameritrade said. The move is aimed at saving some $8.8 million a year in interest payments, according to the company.

Ameritrade, based in Omaha, Nebraska, also said 39,000 new accounts were opened during February, for a total of 1.43 million.

Average daily trading volume last month was 114,000 trades per day, the company said. Those figures show a downturn from December, when 52,000 new accounts were opened and average daily trading volume averaged 115,000 trades.

Earlier this week, Ameritrade named Joe Moglia its chief executive officer. Moglia is currently senior vice president of Merrill Lynch.

Moglia will stay on at Merrill Lynch during a brief transition and will formally join Ameritrade later in this month. He will replace Joe Ricketts, who will continue to serve as Ameritrade's chairman, the company said.

In January, Ameritrade said it let go more than 230 full-time employees, or about 9 percent of its workforce, as well as 100 temporary workers. The company said a harsh market environment made the job cuts necessary.