By Daniel Huang
E*Trade Financial Corp. posted higher earnings Thursday on
increased fee revenue and the realization of a tax benefit.
Excluding the tax benefit related to finalizing an audit with
the Internal Revenue Service, E*Trade reported net income of $72
million, or 25 cents per share, up from $69 million from the same
period a year ago.
With the tax, the online brokerage firm reported earnings of
$292 million, or 99 cents a share. Revenue rose to $445 million
from $438 million a year earlier. Analysts surveyed in a Thomson
Reuters poll had projected per-share earnings of 27 cents on
revenue of $447 million.
Lower trading volume pulled down daily average revenue trades to
149,000, from 155,000 a year earlier. Commissions, fees and service
charges and other revenue in the second quarter increased 2% to
$167 million.
The company added 25,000 net new accounts during the quarter,
down from 33,000 accounts over the same period last year, bringing
total customer assets to $302 billion, an increase from $281
billion a year ago.
"Despite slower trading volumes across the industry, our
business continued to grow," said Chief Executive Paul Idzik in a
release.
Total operating expenses increased $25 million from a year ago
to $309 million. Charges included $6 million of executive severance
to former Financial Chief Matthew Audette and $9 billion related to
a contact with a third party servicer. The Wall Street Journal
reported in June that Mr. Audette would be leaving E*Trade to take
the same role at brokerage firm LPL Financial holdings Inc. He was
replaced by former chief risk officer Michael Pizzi.
E*Trade's results come after rival TD Ameritrade Holding Corp.
on Tuesday said its profit rose on the back of an unexpected boost
in trading activity. Rival Charles Schwab Corp. said its earnings
grew from higher fees and interest revenue.
Write to Daniel Huang at dan.huang@wsj.com
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