|
Brokers showing strain
|
 |
March 9, 2001: 3:48 p.m. ET
TD Waterhouse to cut staff; Ameritrade lowers 2001 earnings outlook
|
NEW YORK (CNNfn) - TD Waterhouse Group Inc., the nation's No. 2 discount broker, announced Friday that it plans to cut employees through attrition, while rival AmeriTrade Holding Corp. lowered its revenue outlook for fiscal 2001.
The two discount brokers joined the crowd of companies showing the  strain of the ongoing stock market slump.
New York-based TD Waterhouse said it would defer discretionary spending, reduce full-time employee count through normal attrition and prioritize projects that have shorter payback periods. TD Waterhouse (TWE: Research, Estimates) also said February new accounts were grew to 54,7000 in February, a 5 percent rise from January.
"Difficult market conditions have affected our customers and our business, and they may continue to do so as the year continues," said Steve McDonald, TD Waterhouse's chief executive, in a statement.
Other online brokers like top discount broker Charles Schwab Corp. also have acknowledged a slowdown in business in recent months. San Francisco-based Schwab (SCH: Research, Estimates) has announced executive pay cuts and other cost-saving steps.
AmeriTrade cuts outlook
Earlier Friday, online stock broker AmeriTrade Holding Corp. cut its revenue outlook for fiscal 2001. The discount broker now expects fiscal 2001 revenue between $470 million and $600 million, below the $570 million-to-$650 million it forecast in January.
For its fiscal second quarter, ending March 30, Omaha, Neb.-based AmeriTrade (AMTD: Research, Estimates) expects revenue between $107 million and $126 million, compared with the $115 million-to-$138 million it originally projected for this period.
First-quarter revenue was $130.7 million.
A slowdown in the U.S. economy has hurt corporate profitability and stock prices, prompting individual investors to retreat from opening new  accounts and trading shares. AmeriTrade said in January it would cut about 9 percent of its staff as it wrestles with the challenging environment.
AmeriTrade said on Friday 39,000 new accounts were opened in February, and average trading volume for that month was 114,000 trades per day. By contrast, investors opened 52,000 new accounts in December, and average trading volume in that month was 115,000 trades per day.
It also forecast $300 million-to-$400 million in commission revenue for fiscal 2001, and $72 million-to-$80 million in second-quarter commission revenue, compared with $82.1 million in the fiscal first quarter. It expects advertising spending to drop to between $40 million and $50 million in the second quarter from $57.5 million in the first quarter. For the full fiscal year, AmeriTrade projected $180 million to $200 million in advertising costs.
Shares for TD Waterhouse fell 38 cents to $12.22, Schwab dropped $1.05 to $18.55 and AmeriTrade tumbled by 56 cents to $7.37 in afternoon trading.
-- from staff and wire reports 
|
|
|
|
|
 |
|
