By Dow Jones Business News,
January 23, 2014, 04:21:00 PM EDT
By Julie Steinberg
E*Trade Financial Corp. swung to a fourth-quarter profit as the online brokerage firm reported more daily client
trades and higher revenue from commissions and fees.
For the quarter ended Dec. 31, the company reported a profit of $58 million, or 20 cents a share, compared with a
loss of $186 million, or 65 cents a share, a year earlier. Net revenue fell 4.4% to $447 million as compensation,
professional-services and restructuring expenses grew.
Analysts surveyed by Thomson Reuters expected earnings of 19 cents a share on revenue of $425.8 million.
Before results were released, the company's shares closed Thursday at $21.05.
E*Trade and other online brokerages had been hurt by a more than three-year slide in stock-trading activity from
individual investors due to a languid economic recovery. But the trading environment improved in 2013 due to a robust
stock market, increasing the willingness of investors to trade.
TD Ameritrade Holding Corp. earlier this week reported its fiscal first-quarter earnings rose 31%, while Charles
Schwab Corp. said last week fourth-quarter earnings surged 51%, amid stronger trading revenue and asset-management fees.
"Our core business posted solid results, as the improving operating environment fueled encouraging trends in credit
and retail engagement," said Chief Executive Paul Idzik in a statement.
At E*Trade, average daily client trades totaled 160,000 in the latest period, up 25% from a year earlier.
The company added $3.2 billion in net new assets during the quarter, compared with $2.3 billion a year earlier and
$2.4 billion in the previous quarter.
Commissions, fees and service charges, principal transactions and other revenue in the fourth quarter totaled $178
million, up from $151 million a year earlier and $164 million in the third quarter.
The firm earlier this month suffered an outage in which customers for a few hours couldn't access the website or
its mobile trading application. The outage wouldn't have had an impact on fourth-quarter earnings because it happened in
the first quarter.
Write to Julie Steinberg at email@example.com
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