E*Trade profits rise with income tax benefits

Positive trade.

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

About the Author

Canaccord Genuity Inc. is a global investment banking and institutional brokerage firm. Their website is www.canaccordgenuity.com.

For disclosures of any equities mentioned here please see: http://www.canaccordgenuity.com/en/ODD/pages/disclosures.aspx.

Comments
comments powered by Disqus