E*Trade breaks even in 3Q

Jan. 2, 2002 4:43 p.m. PT

2 min read

E*Trade Group, Inc. (Nasdaq: EGRP) said Tuesday it had net income of $5.7 Million, or 2 cents a share for its third quarter, and a break-even amount per share from ongoing operations. First Call was expecting a loss of a penny a share.

During the quarter, revenue grew to $330 million, up 77 percent from a year ago. Customer assets rose 121 percent from a year ago to $60.7 billion. Gross margins expanded to 62 percent from 56 percent a year ago, and the company added 330,000 new accounts, bringing its total to 3 million.

The company achieved break-even results from ongoing operations, despite declines in the marketplace, E*Trade said. Shares closed at 17 15/16 Tuesday, well off their 52-week high of 40.

The 2 cents a share the company earned on top of the break-even result from operations came from periodic liquidation of portions of its strategic investment portfolio, E*trade said. Net results compared to loss of 9 cents a share a year ago.

"Even with the market experiencing extreme volatility in the recent quarter, E*Trade's blue-chip brand, scale and agility continued to decouple us from the competition and drive our revenue growth and profitability,'' said CEO Christos M. Cotsakos in a statement.

A few of E*Trade's competitors reported results that were lower-than-expected due to market volatility. DLJdirect's (NYSE: DIR) second quarter missed Wall Street estimates Tuesday, and sales fell sequentially.

Other brokerage firms Merrill Lynch & Co. Inc. (NYSE: MER) and Charles Schwab Corp. (NYSE: SCH), on reported strong profit gains despite the recent downturn.

Knight Trading Group Inc (Nasdaq: NITE) said Wednesday it beat Wall Street's second-quarter profit targets on the back of strong growth in the number of trades executed and expansion overseas.

It posted net income of $67.22 million, or 53 cents per share, for the three months ended June 30 compared with pro forma net income of $58.03 million, or 46 cents per share, a year ago. First Call was expecting earnings of 51 cents a share.