July 23 Discount brokerage firm E*Trade
Financial Corp reported a quarterly profit that
narrowly beat estimates due to lower costs and as the company
set aside less money to cover bad loans.
E*Trade reported net income of $69 million, or 24 cents per
share, in the second quarter ended June 30, compared with a net
loss of $54 million, or 19 cents per share, a year earlier.
The company's year-earlier quarter included a goodwill
impairment charge of $142 million.
Analysts had expected a profit of 23 cents per share,
according to Thomson Reuters I/B/E/S.
A 31 percent drop in operating costs more than offset a
marginal decline in revenue, which fell to $438 million from
The brokerage company, which was on the brink of failure
during the financial crisis due to its bank's subprime mortgage
portfolio, set aside $12 million to cover bad loans, compared
with $46 million a year earlier.
Daily average revenue trades (DARTs) rose to 155,194 from
149,670. E*Trade had 3.1 million brokerage accounts as of June
30, up 4.7 percent from a year earlier.
"Through the first half of the year we have already
surpassed the previous year's total for net new brokerage
accounts, margin loan balances remained near record highs, and
total customer assets have again reached all-time highs," Chief
Executive Paul Idzik said in a statement.
The company also reported an 11 percent rise in net
operating interest income to $270 million.
Discount brokers thrive when the spread between short-term
and long-term interest rates widen so that they can invest
client cash at higher rates than they pay for the cash.
Rival TD Ameritrade Holding Corp said on Tuesday quarterly
net income rose 3 percent, while Charles Schwab Corp
last week reported a double-digit growth in second-quarter
revenue and profit.
Shares of E*Trade closed at $21.27 on the Nasdaq on
(Reporting By Sudarshan Varadhan; Editing by Sriraj Kalluvila)