E*Trade Financial Corp. swung to a third-quarter profit as its recent acquisition of online broker OptionsHouse LLC helped drive customer accounts and assets, though a key trading metric declined.

Earnings and revenue beat Wall Street expectations.

E*Trade has focused on making its brokerage business more competitive. The company last month ousted Chief Executive Paul Idzik, who had been in the post since January 2013. It also agreed in July to buy Aperture New Holdings Inc., the parent of OptionsHouse, for $725 million in cash, marking its first acquisition in more than a decade.

Karl Roessner, previously the firm's general counsel, succeeded Mr. Idzik as CEO. Mr. Roessner has been with E*Trade since 2007, before mortgage exposure upended the firm during the financial crisis and put it behind its rivals in the battle to win brokerage business.

E*Trade ended the third quarter with 3.44 million brokerage accounts, an increase of nearly 162,000 from the prior quarter, including 148,000 from OptionsHouse.

The company said its customers added $5.4 billion in net new brokerage assets during the period, including $3.7 billion from the OptionsHouse deal. It ended the quarter with $306.8 billion in total customer assets, up from $276.6 billion a year earlier and $285.9 billion at the end of the prior quarter.

But its daily average revenue trades decreased 2.6% to 151,905 from a year earlier and fell 0.4% from the second quarter.

In all, E*Trade posted earnings of $139 million, or 51 cents a share, compared with a year-earlier loss of $153 million, or 53 cents a share. The latest results include $19 million in severance and restructuring charges, versus $409 million in charges a year earlier. Revenue grew to $486 million.

Analysts polled by Thomson Reuters expected earnings of 39 cents a share on revenue of $471 million.

Rival Charles Schwab Corp. reported stronger-than-expected results earlier this week as an increase in new brokerage accounts and higher asset-management fees helped offset a decline in trading revenue. TD Ameritrade Corp. is slated to report Tuesday.

Write to Lauren Pollock at lauren.pollock@wsj.com

 

(END) Dow Jones Newswires

October 20, 2016 16:35 ET (20:35 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
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