E*Trade Earnings Surge on Tax Benefit, New Accounts
April 21 2016 - 4:40PM
Dow Jones News
E*Trade Financial Corp. said its first-quarter profit nearly
quadrupled, helped by an income-tax benefit and a big increase in
new brokerage accounts.
Earnings easily beat Wall Street estimates.
"While economic uncertainty persisted throughout the quarter,
our customers remained active while generating healthy levels of
new accounts and assets," Chief Executive Paul Idzik said in
prepared remarks.
The company ended the period with 3.3 million brokerage
accounts, an increase of 45,000 from the prior quarter. That growth
accelerated from a net 39,000 added in the first quarter of 2015
and 13,000 accounts gained in the previous quarter.
Customers added $2.9 billion in net new brokerage assets during
the period. But partly due to the market volatility at the start of
the year, E*Trade ended the quarter with $285 billion in total
customer assets, down from $288 billion at the end of the prior
quarter and $299 billion a year earlier.
E*Trade's daily average revenue trades declined 3% to 165,000
from a year earlier, but increased 12% from the fourth quarter.
In all, the online broker posted a profit of $153 million, or 53
cents a share, up from $40 million, or 14 cents a share, a year
earlier. Excluding an income-tax benefit, earnings were 43 cents a
share. Revenue rose 7% to $472 million.
Analysts polled by Thomson Reuters were looking for earnings of
33 cents a share on revenue of $474 million.
E*Trade said its allowance for loan losses was $322 million,
down from $353 million in the previous quarter and $402 million in
the first quarter of last year.
Rivals Charles Schwab Corp. and TD Ameritrade Holding Corp.
reported results in the past week that benefited from increased
trading activity among clients.
Write to Lauren Pollock at lauren.pollock@wsj.com
(END) Dow Jones Newswires
April 21, 2016 16:25 ET (20:25 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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