E*TRADE (ETFC) reported its fourth quarter earnings on Thursday. The results were far worse than analysts were expecting. E*TRADE reported a loss of 65 cents per share in the quarter. Analysts were expecting a loss of 54 cents per share from the company. E*TRADE announced revenue in the quarter of $467.7 million, which came up just short of analysts estimates of $472.46 million. Revenue also dropped 1.5% from the same quarter a year ago. In the fourth quarter of 2011, E*TRADE lost just two cents per share.

It is important to point out that E*TRADE had a couple one-time charges that knocked this number down quite a bit. The company’s quarterly result included a pre-tax charge of $257 million, or 59 cents per share, from a move to refinance $1.3 billion in debt. E*TRADE also recorded a charge of $38 million, or 13 cents per share, due to a change in California tax codes.

Daily Average Revenue Trades (DARTs) were down nine percent from a year ago. Net operating interest income and non-interest income declined significantly in the quarter. Lower fees and service charges as well as decreased net gains on loans and securities contributed to the large decline in these areas.

On the positive side, E*TRADE took a big step to reduce balance sheet risk. The company’s provision for loan losses in the quarter dropped 47 percent sequentially. The company’s loan portfolio was reduced by a large amount due to its $455 million worth of┬ápay downs.

E*TRADE noted on the earnings call Thursday that 2012 saw a record low attrition rate of just 9 percent. More customers sticking around is definitely an encouraging sign. The company is hopeful that initial positive signs of increased DARTs in January will continue through the first quarter of 2013.

For the full press release of E*TRADE’s fourth quarter earnings report click here.