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DLJdirect earnings a hit, NetB@nk misses

DLJdirect (NYSE: DIR) earned net income of $5.1 million, or 5 cents a share in the second quarter, slamming First Call's estimated loss of 1 cent a share, according to a Tuesday release by parent Donaldson, Lufkin & Jenrette, Inc. (NYSE: DLJ), which created a stock to track its online brokerage service last May.

Shares jumped 9/16 to 25 7/16 in initial trading Tuesday, below a 52-week high of 45 5/8. DLJdirect's results follow E*Trade (Nasdaq: EGRP), which reported earnings on Monday.

Earnings have more than doubled compared to $1.2 million, or 1 cent a share earned in the same period of 1998. Total revenue for the second quarter of 1999 were $59.7 million, double those for the comparable period a year ago and 26 percent ahead of revenues for the first quarter of 1999.

Donaldson, Lufkin & Jenrette issued 18.4 million shares of common stock to tracks the performance of DLJdirect On May 26. Net proceeds from the offering were $343.2 million, of which $235.9 million was allocated to DLJdirect.

Commissions, DLJdirect's largest source of revenues, were $35.7 million during the second quarter of 1999, a 91 percent greater than the second quarter of 1998. The number of total accounts, active accounts, assets in customer accounts and average number of trades per day also showed an increase versus the second quarter of 1998. DLJdirect executed 1.4 million trades during the second quarter of 1999, compared to 675,000 trades executed during the second quarter of 1998.

Costs of the recently launched ad campaign may temper earnings in the future, though. "Our new $65 million campaign began its initial rollout in late June. The bulk of these advertising expenditures, however, will be incurred as the campaign moves into full gear later this year. We anticipate that the benefits of increased brand awareness will be realized in subsequent quarters,'' said Blake Darcy, Chief Executive Officer of DLJdirect in a company release.

DLJdirect is getting more customers, fast. It opened 1,050 new accounts per day, double the daily average opened in the second quarter in 1998. DLJ isn't the only one profiting from the increase in online trading; assets in customer accounts on June 30, 1999 were $13.3 billion, up from $6.7 billion at the end of the second quarter of 1998.

Donaldson, Lufkin & Jenrette, Inc. also reported earnings today that creamed expectations. Earnings were $1.14 a share, far ahead of the 84 cents a share predicted by First Call. They were also 9 percent greater than the $1.05 per share reported a year ago.

In other earnings today:

  • Net.B@nk, Inc. (Nasdaq: NTBK), the largest federally insured Internet-only bank, said Tuesday the company recorded $768,000 in net income, or 3 cents a share, for the second quarter, missing First Call's estimate of 4 cents a share by a penny.

    Shares fell 2 to 28 3/4 in initial trading.

    Earnings show an improvement compared to $158,000 in net income or 1 cent a share for the same quarter a year ago. All per share amounts reflect the company's three for one stock split on May 14, 1999. Net.B@nk also filed a secondary offering last May.

    The company also announced that it had over 39,000 accounts, a growth of 114% since the beginning of the year. "We more than doubled our own marketing efforts, and we saw increased advertising of Internet banking in general. Both contributed to the general public's awareness of the ease and convenience of online banking,'' said D.R. Grimes, CEO of Net.B@nk in a company release.

    "We will continue to focus on being a complete online banking solution for our customers.During third quarter, we plan to expand our lending products to include home equity loans over the Internet, as well as other consumer lending products. We continue to focus on adding services that will provide our customers greater control and independence as well as quicker response times,'' Grimes added.