E*TRADE (ETFC) released third quarter earnings last Thursday, and the results weren’t pretty. E*TRADE reported a loss of 10 cents per share in the third quarter. Analysts were expecting the company to report a profit of 9 cents per share. Investors quickly reacted very negatively to the earnings news. E*TRADE shares lost more than 7 percent in Friday’s trading.
E*TRADE’s earnings were lower largely because the provision for loan losses increased from $98 million a year ago to $141 million this quarter. In addition, Daily Average Revenue Trades (DARTs) decreased 22 percent from the same quarter a year ago. Net new brokerage assets totaled $1.9 billion, which was down from $2.6 billion in the third quarter of 2011.
There were a few positive numbers in the largely disappointing report. Net new brokerage accounts numbered 18,000 this quarter, compared to just 13,000 in the third quarter last year. Another positive mark for the company was the rise in the average commission per trade to $11.24. That is a healthy improvement for the company compared to the $10.68 figure from the previous quarter.
E*TRADE CEO Frank Petrelli pointed out that the company has more net new accounts in the first three quarters of 2012 than they had in all of 2011. This is primarily due to record account retention figures. Petrelli remarked, “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.”
For the full press release click here.