E*TRADE Financial Earnings: Tops the Revenue Estimate, Lighter on Profits

S&P 500 (NYSE:SPY) component E*TRADE Financial Corporation (NASDAQ:ETFC) swung to a loss in the third quarter, missing analysts’ forecast. E*TRADE Financial provides online brokerage and related products and services primarily to individual retail investors.

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E*TRADE Financial Corporation Earnings Cheat Sheet

Results: Reported a loss of $28.6 million (10 cents per diluted share) in the quarter. E*TRADE Financial Corporation had a net income of $70.7 million or 24 cents per share in the year-earlier quarter.

Revenue: Fell 16.7% to $490 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: E*TRADE Financial Corporation fell short of the mean analyst estimate of 11 cents per share. It beat the average revenue estimate of $457.4 million.

Quoting Management: “While this quarter’s results were marked by some unique items, we made good progress on our deleveraging and cost reduction initiatives, and continued to improve our risk profile,” said E*TRADE’s Chairman and Interim CEO, Frank Petrilli. “We delivered on our strategic initiatives during the third quarter and executed well in our brokerage business, while continuing to manage down the loan portfolio. We have identified or completed over $4 billion of balance sheet reductions, which are critical to achieving our goal of distributing capital from the Bank to the Parent.”

Key Stats:

Revenue has fallen in the past four quarters. Revenue declined 11.1% to $533.1 million in the second quarter. The figure fell 8.1% in the first quarter from the year earlier and dropped 8.2% in the fourth quarter of the last fiscal year from the year-ago quarter.

The company fell short of estimates last quarter after beating the mark the quarter before with net income of 13 cents versus a mean estimate of net income of 9 cents per share.

The company’s loss in the latest quarter follows profits in the previous two quarters. The company reported a profit of $39.5 million in the second quarter and a profit of $62.6 million in the first quarter.

Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the fourth quarter has moved down from 15 cents a share to 12 cents over the last ninety days. For the fiscal year, the average estimate has moved down from 52 cents a share to 48 cents over the last sixty days.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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