E*Trade Swings to Loss
October 22 2015 - 4:30PM
Dow Jones News
E*Trade Financial Corp. reported a third-quarter loss Thursday
after recording charges during the period related to the
termination of its wholesale funding obligations.
The online brokerage firm reported a net loss of $153 million,
or 53 cents a share, compared with net income of $86 million, or 29
cents a share, in the same period a year ago. Revenue came to $73
million after $370 million of losses related to the debt
termination. Excluding the charges, net income would have been $98
million, or 33 cents a share, and revenue would have totaled $443
million.
Analysts surveyed in a poll by Thomson Reuters had projected
per-share earnings of 29 cents and revenue of $446 million.
E*Trade also announced that President Navtej Nandra will leave
the firm at the end of the year and that it will record a charge of
approximately $6 million in the fourth quarter in connection with
his departure. Mr. Nandra joined the brokerage company in 2013. The
company doesn't intend to fill the position.
In September, E*Trade announced plans to eliminate all of the
$4.4 billion of wholesale funding obligations from its bank balance
sheet by quarter-end. The restructuring was the company's latest in
a series of moves to pay down debt and refinance in recent
years.
Chief Executive Paul Idzik said the move was an "important leap
forward on the capital front" and will create opportunities for
more balance sheet growth funded by customer deposits.
E*Trade added 19,000 net new brokerage accounts in the quarter,
down from 24,000 a year ago, and brought in $2.1 billion in net new
brokerage assets from its customers, down from $2.3 billion a year
ago. Total customer assets fell to $276.6 billion from $281.7
billion a year ago. Commissions, fees and service charges and other
revenue was $170 million, up slightly from $167 million a year
ago.
Trading volume also increased in a seasonally slow quarter as
daily average revenue trades rose to 156,000, up 2% from a year
ago. In the midst of global growth fears roiling the markets this
summer, E*Trade's retail customer base logged an record trading day
in August, executing 394,000 trades in one day.
Rival Charles Schwab Corp. reported last week higher profits on
the strength of market turbulence that resulted in a record number
of client revenue trades. TD Ameritrade Holding Corp. will report
earnings next week.
Write to Daniel Huang at dan.huang@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
October 22, 2015 17:15 ET (21:15 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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