E-Trade Financial said its quarterly profit rose as an income tax benefit and lower provisions for loan losses in its legacy mortgage portfolio helped offset soft client-trading numbers. The online broker's first-quarter net income came in at $62.6 million, or $0.22 a share, from $45.2 million, or $0.16, a year earlier. E-Trade recorded an income tax benefit of $26 million, or $0.09 a share, related to losses it took in 2009 on a debt exchange. It said that at the time, the losses were incorrectly treated as non-deductable.
Revenue for the most recently completed quarter was $489.4 million, which included $31 million of net gains on loans and securities, and a net impairment of $4 million. Revenue in the year-earlier period was $537 million.
Wall Street expected E-Trade to earn $0.09 per share including items on revenue of $468.4 million. While investors responded positively Friday, analysts cautioned that with interest rates staying low and seasonal issues approaching with the summer, the long-term outlook for E-Trade shares isn’t entirely clear.
E-Trade Financial (ETFC : NASDAQ : US$10.47), Net Change: 0.60, % Change: 6.03%, Volume: 16,167,577