The Final Line

 
 
By John McCormick  |  Posted 2003-11-21 Email Print this article Print
 
 
 
 
 
 
 



The Final Line

Despite the technical challenges, business goals are being met. The two companies systems have been integrated into a single processing platform that can handle nearly half a million trades a day; currently its handling 158,000 a day.

The company cut $80 million in technology-related expenses in the consolidation, allowing it to beat its overall cost-cutting target of $173 million by more than $70 million. And the company hardly has to worry about another collapse of its market. Its break-even point—the amount of activity at which it can start to make money—has been reduced to 29,000 trades a day, from 50,000.

This is reflected in its bottom line. On Oct. 21, Ameritrade posted record year-end results—net income of $137 million on revenue of $713 million.

Not bad for a company that went from a profit of $69.6 million on revenue of $654.5 million in fiscal 2000 to a $91.2 million loss on revenue of $498.7 million in fiscal 2001.

It certainly is a big enough swing to make MacDonald a happy man. On Oct. 22, at the "CFO & IT Value" conference in Chicago, he crowed that Ameritrades results now put it in the "95th percentile" of large American companies, in profitability.

And, even though he has left his temporary CIO hat behind, he also said that Ameritrade was not really a financial-services firm, after all.

He said he now considers it to be … a software-development company.



 
 
 
 
Editor-in-Cheif
john_mccormick@ziffdavisenterprise.com
Before joining Baseline, John was the editor of Inter@ctive Week, another Ziff Davis publication. He was the editorial director at SIGS Publications and the editor of both the print and online editions of CMP Media's InformationWeek. At CMP, he wrote a popular column, 'McCormick Place,' that focused on technology and business. He also served as the editor-in-chief of InfoDaily and appeared as a regular analyst on CNBC's Technology Edge program.

 
 
 
 
 
 
 

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