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Discount brokerage TD Ameritrade reported a lower-than-expected quarterly profit as the effects of low interest rates and weaker equities offset a surge in client trades in response to volatile markets.

The company said Tuesday that it had earned $163.7-million (U.S.), or 29 cents a share, in the fourth quarter ended on Sept. 30, compared from $114-million, or 20 cents a share, a year earlier.

Analysts on average were expecting a profit of 31 cents a share, according to Thomson Reuters I/B/E/S.

TD Ameritrade also raised its cash dividend by 20 per cent from the previous quarter to 6 cents per share.

The impasse over the U.S. debt ceiling, the downgrading of the U.S. credit rating, and concerns that Europe's sovereign debt crisis could drag the global economy back into recession led to a 14 percent drop in U.S. equities in the quarter, as measured by the Standard & Poor's 500 index.

That drop, along with lower short-term interest rates, weighed on the shares of retail brokers. TD Ameritrade's share price dropped nearly 25 per cent in the quarter, to $14.71. The Omaha, Nebraska-based company's shares have risen about 10 per cent since then, closing at $16.23 on Monday.

The stock fell 1 per cent to $16.05 in trading before the market opened on Tuesday.

"All indicators are telling us that this uncertain economic environment is here to stay for the next year or two, and as a management team we are planning accordingly," TD Ameritrade Chief Executive Officer Fred Tomczyk said in a statement.

He said the company would increase its focus on managing its growth through improving its processes and operational efficiencies.

TD Ameritrade said revenue rose to $703.5-million from $608.8-million. Analysts were expecting $715-million.

Clients made a record 415,739 trades per day in the quarter, up from 317,684 a year earlier. Commission and transaction fees rose to $315.5-million from $250-million.

The company added $12.4-billion in net new client assets in the quarter.

TD Ameritrade said it expects to earn $1.00 to $1.35 per share for its 2012 fiscal year. Its fiscal 2011 profit was $1.11 per share.

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