The company today was touting its ability "to continue to manage for profitability despite market conditions."

Net income came in at $1.9 million or 1 cent a share, compared to a loss of $54.2 million or 30 cents a share in the year-ago period. Net revenues came in at $106.7 million, compared to $119 million a year earlier. Analysts on average had been expecting earnings of 2 cents a share.

Indicating that the Internet recession is continuing despite whatever some economists might be saying, Ameritrade said that average trades per day were 89,129, compared to 113,164 in the same period a year earlier.

So how did they make a profit? Cost-cutting. The company slashed its marketing spending by nearly half, extending an ongoing drive to reduce expenditures. Also on the good news side, 76,000 new accounts were opened at an average cost per account of $294, bringing total core brokerage accounts to 1,877,000, an increase of 27 percent from a year ago.

"Even though trading levels are still down, we have clearly shown that we are effectively managing the factors within our control in order to maintain one of the best operating margins in the industry," said Joe Moglia, chief executive officer of Ameritrade.

On the Datek deal, Moglia said that "we are ... uniting two firms with the fastest growing account bases, lowest cost operations and highest operating margins among our peer group."

But clearly it's not going to be a walk in the park. The company said it expects to earn between 2 to 5 cents a share in the third and fourth quarters, and between 13 to 27 cents a share for all of 2003. Analysts had been expecting earnings of 6 cents a share in the third quarter, and 33 cents for 2003.

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