Updated from 5:15 p.m. EDTE*Trade Financial ( ET) said profits rose sharply in the second quarter thanks to a gain from the sale of its ATM business unit. New York-based E*Trade posted a second-quarter profit of $123 million, or 31 cents a share, compared to $13 million, or 3 cents a share, in the same period last year. The results include a 7-cent-a-share gain from the sale of its ATM business E*Trade Access, and a more favorable tax rate in the quarter added a penny. Analysts, on average, were expecting a 19-cent-a-share profit compared to 23 cents in the first quarter. Shares rose 5.6% in after-hours trade to $10.88. In the regular session, E*Trade rose 6% to $10.94. "Combined brokerage and bank segment results held flat with the first quarter despite a 19% sequential decline in daily average revenue trades," said CEO Mitchell Caplan on a conference call. "While we cannot control the macroeconomic factors that drive particular aspects of our business, we remain intensely focused on what we can control." During the second quarter, E*Trade strengthened its balance sheet and improved operational efficiencies, Caplan said. Net revenue rose 3% to $381 million. The company said its 2004 GAAP earnings guidance range of 75 cents to 90 cents a share is being increased and narrowed to between 87 cents and 97 cents a share to reflect the gain on the sale of the ATM business, strong year-to-date results and the company's outlook for the rest of the year. E*Trade said daily average revenue trades reached 127,400 in the quarter, up 9% from last year, but down 19% from the first quarter.