) is scheduled to report its second-quarter 2014 results after the
market closes on Wednesday, Jul 23.
E*TRADE started 2014 on a strong note, reflecting its efforts
towards achieving growth and profitability. In the last
quarter, the company delivered a positive earnings surprise of
43.48%, driven by strong brokerage activity. Rise in total daily
average revenue trades (DARTs) and the completion of the sale of
its market making business in the quarter were the positives.
Will E*TRADE be able to keep the earnings streak alive after
combating the challenges the industry witnessed during the quarter?
Let's see what factors might have influenced the earnings report
this time around.
Factors to Influence Q2 Results
E*TRADE has some encouraging traits that may support its results.
The company's initiatives to reduce balance sheet risk are a
positive, although it will put near-term pressure on the net
interest margin. Moreover, E*TRADE's decision to focus on core
operations is commendable.
However, the unfavorable macro issues may weigh on E*TRADE's top
line in the quarter. Further, a challenging economy and market
volatility might drive down profitability.
Sluggish economic conditions will no doubt partly impact E*TRADE's
performance in the quarter. However, the company's monthly activity
updates since Apr 2014 affirm an overall increase in total customer
Activities of E*TRADE during the quarter were inadequate to win
analysts' confidence. As a result, the Zacks Consensus Estimate for
the quarter remained stable at 23 cents per share over the last 7
Our proven model does not conclusively show that E*TRADE is likely
to beat the Zacks Consensus Estimate in the second quarter. That is
because a stock needs to have both a positive
and a Zacks Rank #1 (Strong Buy) or at least 2 or 3 for this to
happen. Unfortunately, this is not the case here as elaborated
The Earnings ESP for E*TRADE is 0.00%. This is because both
the Most Accurate estimate and the Zacks Consensus Estimate stand
at 23 cents per share.
E*TRADE's Zacks Rank #4 (Sell) further lowers the predictive power
Stocks That Warrant a Look
Here are some finance stocks you may want to consider, as our model
shows that these have the right combination of elements to post an
earnings beat this quarter:
The earnings ESP for
Regions Financial Corporation
) is +4.76% and it carries a Zacks Rank #3 (Hold). The company is
scheduled to release its second-quarter results on Jul 22.
CIT Group Inc.
) has an earnings ESP of +2.33% and carries a Zacks Rank #3 (Hold).
It is scheduled to report its second-quarter results on Jul 22.
) has an earnings ESP of +10.29% and carries a Zacks Rank #2 (Buy).
It is scheduled to report its second-quarter results on Jul 24.
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