Headlines:
Ameritrade Trims Profit Forecast
Ameritrade Holding Corp. has lowered its prediction of fiscal 2005 earnings because of weak trading volume.
The Omaha online brokerage said Friday that it expects to make 73 to 83 cents a share in the fiscal year, which will end Sept. 30. Last month it predicted 77 to 87 cents when it released its second quarter earnings.
In the current quarter, Ameritrade expects to earn 16 to 21 cents, and in the fourth quarter it expects earnings of 18 to 23 cents.
"We're seeing lackluster market performance and feel retail investors are waiting for economic conditions to improve," chief executive Joe Moglia said in a press release. "Therefore we feel it is prudent to adjust our earnings guidance at this time."
Ameritrade reported an average of 140,000 client trades per day in April, down 30% from April 2004. It opened 34,000 new accounts in the month and closed 19,000; it had a total of 3.68 million accounts at the end of April.
Ameritrade said that client assets were $73 billion, including $12.7 billion in cash and money market assets.
The rival E-Trade Financial Corp. has made an offer to acquire the company, though last week Ameritrade said it was not interested.
Published reports said Ameritrade was negotiating to buy TD Waterhouse Group Inc., a unit of Toronto-Dominion Bank. On Friday a spokeswoman for the bank declined to discuss the matter.
Uptick for Harland Check Sales
Though check use is generally down, John H. Harland Co., the No. 2 check printer, said its own check sales rose substantially in the first quarter.
But chairman and chief executive Timothy C. Tuff told analysts Wednesday that the gains came from new customers and do not indicate a reversal of the general trend. Harland estimates that the number of checks it sells - including those never used - is sliding 4% to 5% a year.
On May 10 the Decatur, Ga., company reported first-quarter net income of $17.3 million, up 32.4% from a year earlier, on sales of $215.8 million, up 13.3%. It credited its printed-product division, whose net jumped 39.5%, to $24.8 million, as sales rose 16.6%, to $140.4 million.
Harland has been diversifying to offset the general decline in checks but has also been trying to cut costs and win new business for the division.
Sales of its software and services division increased 6.4%, to $47.6 million, and income 23.3%, to $4.9 million. The Scantron division's sales rose 8.9%, to $28.2 million, and its income 4.7%, to $6.6 million; the division provides testing and assessment services and supplies.
Last month Harland announced that it was buying a rival, Liberty Enterprises Inc. of Mounds View, Minn., for $160 million. The deal would add new markets, especially small and midsize credit unions, along with products featuring licensed characters such as Superman and Popeye.
Stan Hollen, Liberty's president and CEO, says checks with licensed characters are popular; analysts say they will continue to sell well.
Fed Expects 15% Dip in Checks
The Federal Reserve Board expects the Federal Reserve banks to process 15% fewer consumer checks this year than last.
So it said in the annual report it issued last month. In October it projected a decline of 13% to 15%.
In the new report, the Fed said the shift away from paper checks has been accelerating. The reserve banks processed about 13.6 billion checks last year, a 12% drop, though at the end of 2003 the Fed had predicted a 9% decline. (It later revised the prediction.) The dip in 2003 was 4.7%.
