Loading...
Loading...
E*Trade Financial Corp.
swung to a third-quarter profit as the online
brokerage firm reported higher daily average revenue trades, sharply lower
loan-loss provisions and more controlled expenses.
However revenue missed the estimates of analysts polled by Thomson Reuters.
E*Trade also disclosed that it will sell its G1 Execution Services
market-making unit to Susquehanna International Group, LLP for $75 million.
The unit handles the stock orders of individual investors that come in
through the discount brokerage's online portal, as well as orders from other
online brokers.
E*Trade had been aiming to hammer out a deal to sell G1 amid regulatory
scrutiny of its order routing practices. Under the deal with
Susquehanna--expected to close in three to six months--E*Trade will route
70% of its customer equity order flow to G1 over the next five years.
Chief Executive Paul Idzik in a prepared statement said the deal will allow
E*Trade "to concentrate our time and attention on the core business and our
customers."
E*Trade reported a profit of $47.4 million, or 16 cents a share, compared
with a year-earlier loss of $28.6 million, or 10 cents a share. Revenue
plunged 15% to $416.8 million as the brokerage reported an 85% drop in gains
on loan and securities.
Analysts polled by Thomson Reuters most recently projected earnings of 16
cents on revenue excluding loan loss provisions of $419 million.
On the trading front, E*Trade posted daily average revenue trades of 145,000
up 13% from a year earlier, but down 3% from the second quarter.
Commissions, fees and service charges, principal transactions, and other
revenue in the third quarter were $164 million, compared with $177 million
in the prior quarter and $153 million in the third quarter of 2012. Average
commission per trade for the quarter was $11.15, compared with $11.10 in the
prior quarter, and $11.24 in the year-earlier quarter.
In the latest quarter loan-loss provisions were down sharply to $37.4
million from $141 million a year earlier. The year-earlier period included
$50 million related to loan charge-offs associated with newly identified
bankruptcy filings.
Meanwhile net charge-offs of $29 million were at the lowest level since
early 2007 for E*Trade.
The brokerage also showed progress on tightening expenses. Operating
expenses fell 6.3%, driven by declines in compensation among other items.
E*Trade also reported that its corporate cash ended the period at $373
million, an increase of $122 million from the prior period, driven primarily
by a $100 million dividend distributed from the bank to the parent company
during the quarter.
The brokerage firm in September said it had received regulatory approval to
stream $100 million from its bank to the parent company, while also
disclosing plans to seek approval for future distributions of $100 million
per quarter.
Loading...
Loading...
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Posted In: News
Benzinga simplifies the market for smarter investing
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
Join Now: Free!
Already a member?Sign in