TD Ameritrade Holding Corp.'s fiscal third quarter profit fell 12% as the company recorded lower client trading volume compared to the same period last year.

The Omaha, Neb.-based broker on Tuesday posted net income of $157.4 million, or 27 cents a share, in the fiscal third quarter ending June 30, down from $179.4 million, or 30 cents a share, a year earlier, consistent with analysts' expectations as investors become more cautious in the current volatile economy, according to TD Ameritrade. 

TD Ameritrade's revenue fell to $684.8 million from $691.8 million, also in line with analysts expectations, according to TD Ameritrade.

The company's revenue drop was due to a 15% decline in commissions, which make up 41% of revenue, partially offset by an 18% increase in net interest revenue and a 13% rise in fee-based income, Macquarie Capital analyst Ed Ditmire said in a note to clients.

TD Ameritrade clients made an average of 369,716 trades per day in the fiscal third quarter, down 11% from a year earlier. Commission and transaction fees fell to $281.6 million from $333.1 million, squeezing earnings.

TD Ameritrade Chief Executive Officer Fred Tomczyk said that while investors remain cautious because of an uncertain economy, trades at TD Ameritrade so far in July are up 5% from June, with market volatility prompting more short-term bets.

"Despite the economic uncertainty and what looks to be a seasonally slow summer, we delivered solid growth in net new assets and asset-based revenues. Year to date, we have gathered $29.1 billion in net new assets, an annualized growth rate of 11%," Fred Tomczyk said.

During the fiscal third quarter, TD Ameritrade repurchased 4.8 million shares of its common stock at an average price of $20.24 per share, for approximately $97 million.

So far this fiscal year the company has used $191 million to repurchase 10 million shares at an average price of $19.05 per share. It has 20 million shares remaining on its existing stock repurchase authorization.

The company also announced that it has declared a quarterly dividend of five cents per share, which is payable on Aug. 16 to all holders of record of common stock as of Aug. 2.

-Jim McConville