Writedowns Wrack E*Trade
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.- Loading Comments...
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