E*Trade sees gains in 2002
The online brokerage house, in the midst of a diversification push, raises earnings estimates for its fiscal 2002 results and announces plans to buy back shares.
E*Trade now expects to report earnings of between 40 cents and 50 cents per share for ongoing operations in 2002. A consensus of analysts had expected the company to post a profit of 34 cents per share for the year, with predictions ranging from 19 cents to 40 cents.
Brokerage stocks have suffered in the economic downturn, as investors have made fewer trades. E*Trade has tried to diversify, expanding into mortgage banking, credit cards and 401(k) management, among other areas, to bring in new streams of cash.
E*Trade also announced plans to buy 20 million shares of its common stock from Softbank, paying $7.28 per share, or $145.6 million. Softbank will remain the largest shareholder of E*Trade, with about 9 percent of the company's stock. E*Trade's stock closed at $10.46 Friday, up 66 cents, or 6.7 percent.
Softbank, a prominent investor in Internet companies, has been trying to diversify. It said recently that its US Venture Capital arm would focus more on mobile technology start-ups.
Softbank is a shareholder of CNET Networks, publisher of News.com.