E*Trade's Revenue Rises as Volume Picks Up After Brexit
July 21 2016 - 4:40PM
Dow Jones News
E*Trade Financial Corp. said its second-quarter revenue rose 10%
as trading picked up and its allowance for loan losses shrunk,
though the pace of the online broker's new account openings
slowed.
The results beat Wall Street expectations.
"The quarter closed in a frenzy of market activity that impelled
a single-day record of net buying as customers seized opportunities
following sharp market declines," Chief Executive Paul Idzik said,
referring to the steep market selloff in the wake of the U.K.'s
decision to exit the European Union on June 23.
E*Trade's daily average revenue trades increased 2% to 152,000
from a year earlier, but decreased 8% from the volatile first
quarter.
Customers added $1.6 billion in net new brokerage assets during
the period. The company ended the quarter with $286 billion in
total customer assets, down from $302 billion a year earlier but up
from $285 billion at the end of the prior quarter.
E*Trade ended the period with 3.3 million brokerage accounts, an
increase of 23,000 from the prior quarter. But that growth slowed
from a net 25,000 accounts added in the second quarter of 2015 and
45,000 accounts gained in the previous quarter.
In all, the company posted earnings of $133 million, or 48 cents
a share, down from $292 million, or 99 cents a share, in a
year-earlier period that included a $220 million tax benefit.
Revenue rose to $474 million from $429 million.
Analysts polled by Thomson Reuters expected earnings of 38 cents
a share on revenue of $471 million.
E*Trade said its allowance for loan losses was $293 million,
down from $402 million in the second quarter of last year and $322
million in the previous quarter.
Rivals Charles Schwab Corp. and TD Ameritrade Corp. also
reported stronger-than-expected results earlier this week, helped
by the market volatility.
Write to Lauren Pollock at lauren.pollock@wsj.com
(END) Dow Jones Newswires
July 21, 2016 16:25 ET (20:25 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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