Writedowns Wrack E*Trade

10/17/07 - 05:06 PM EDT

Laurie Kulikowski

E*Trade Financial (ETFC Quote) sank 3% in after-hours trading after the online brokerage firm posted a loss in the third quarter due to loan loss provisioning and securities writedowns.

For the third quarter, E*Trade posted a loss of $58 million, or 14 cents a share, compared to a profit of $153 million, or 35 cents a share, in the year-ago quarter. Revenue dropped 45% from a year earlier to $321 million. Analysts, as polled by Thomson Financial, had expected the broker to earn 10 cents a share on $521 million of revenue.

E*Trade also cut its earnings guidance for the year to a range of 75 cents to 90 cents a share. That includes 10 cents' worth of securities writedowns and provisioning due "the possibility of further credit deterioration," it said.

A month ago, E*Trade had said in a restructuring announcement that it expected earnings to come in around $1.05 to $1.15 a share.

The company took a $187 million provision for bad loans and $197 million in securities writedowns. E*Trade said that it expected to take the writedowns over the course of this year and in 2008, it said.

A bright spot in E*Trade's results came from its retail trading activity. In the third quarter, E*Trade's average daily retail trades jumped 15% from the second quarter and 44% from a year earlier to 194,385 trades. Still, the average commission per trade remained relatively flat at $11.71.

< Previous
1 2
Your Recent Quotes: Quote Up0 | Quote Down0
 
Dow S&P 500 NASDAQ
Oil*
64.25
8,324.87
898.72
1,787.40
10 Yr
3.51%
44.13
2.30
9.12
+0.53%
+0.26%
-0.51%
Data delayed 20 min
Get Jim Cramer's Free Newsletter

The Daily Booyah!
Get your daily dose of Cramer in your inbox.
Submit
We respect your privacy.

Premium Stock Ideas
Access Action Alerts Plus to find out Cramer's latest picks now!

Brokerage Partners