E*TRADE Financial Corp. (ETFC) Tops Q1 EPS by 10c

E*TRADE Financial Corp. (NASDAQ: ETFC) reported Q1 EPS of $0.33, $0.10 better than the analyst estimate of $0.23. Revenue for the quarter came in at $475 million versus the consensus estimate of $454.51 million.

Highlights:

• Net income of $97 million, or $0.33 per share
• Total net revenue of $475 million
• Gain on securities revenue of $15 million, including gains related to the sale of the non-agency CMO portfolio
• Loss on early extinguishment of debt of $12 million, resulting from the decision to terminate $100 million in wholesale funding
• Total operating expenses of $290 million, including restructuring charges of $3 million
• Provision for loan losses of $4 million, net of an $11 million benefit from a settlement with a third party mortgage originator
• End-of-period legacy loans of $7.4 billion, including the impact of the decision to sell $0.8 billion of 1-4 family modified loans
• Corporate cash of $525 million(1), including a dividend from the Bank of $75 million and proceeds from the sale of the Company’s market making business of $76 million
• Daily Average Revenue Trades (DARTs) of 198,000
• End of period margin receivables of $7.3 billion
• Net new brokerage accounts of 72,000; record-low annualized attrition rate of 7.1 percent
• Record net new brokerage assets of $4.1 billion; end of period customer assets of $269 billion

“We’ve had a great start to the year across several dimensions of our business, as reflected in our Q1 results,” said Paul Idzik, Chief Executive Officer. “First, overall positive investor sentiment elevated brokerage activity to its highest level in nearly five years, which aided our record net new brokerage assets and brokerage account retention. Second, with a vigilant eye on the balance sheet, we seized opportunities to improve the firm’s risk profile and our financial position. We distributed our third consecutive quarterly dividend from the bank to the parent, reflecting our continued and marked progress against our capital plan. We closed the sale of our market making business. And finally, we evolved the public face of E*TRADE with the launch of our revamped brand platform – Type E* – underscoring our commitment to do more for our customers. In all, we performed remarkably well during the quarter and look forward to building on this momentum throughout the year.”

For earnings history and earnings-related data on E*TRADE Financial Corp. (ETFC) click here.

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