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DLJdirect misses estimates, cites market volatility

Market volatility dinged DLJdirect's second quarter as the company missed Wall Street estimates and sales fell sequentially.

In what was dubbed "a challenging quarter for the online brokerage industry," the company (NYSE: DIR) reported a second quarter loss of $6.6 million, or 6 cents a share, on sales of $84 million.

Earnings tracking firm First Call Corp. projected a loss of 3 cents a share.

DLJdirect's results could boost fears about earnings from other online brokers, notably Ameritrade (Nasdaq: AMTD) and E*Trade (Nasdaq: EGRP). Analysts have been cautious about online brokerage stocks due to the market volatility and lower volume, not to mention inroads made by full service brokers. E*Trade and Ameritrade are expected to report a loss of a penny a share for their June quarters, according to First Call.

Charles Schwab (NYSE: SCH) reported second quarter earnings of $199 million, or 14 cents a share, on revenue of $1.4 billion. Schwab, which offers trading through many channels, acknowledged a second quarter slowdown.

Despite the earnings miss, DLJdirect still showed good growth year-over-year as sales were up 40 percent from a year ago. Sequentially, sales fell 27 percent from the first quarter, when the company posted a profit.

"Unprecedented market volatility over the past three months made for a challenging quarter for the online brokerage industry,'' said CEO Blake Darcy. ``The Nasdaq Composite fell more than 40 percent from its record high set in March, yet we generated quarterly revenues of $84.0 million -- our second best quarter ever."

The company said commissions totaled $45.5 million in the second quarter, up 27 percent over the comparable period a year ago and a 39 percent decline from the first quarter.