Is E*Trade Back on Track After Q3 Earnings?

Banking, finance, and taxes

Published: October 18, 2019 11:35 am

Last Updated: January 30, 2020 2:25 pm

When E*Trade Financial Corp. (NASDAQ: ETFC) released its third-quarter financial results after the markets closed on Thursday, the firm posted $1.08 in earnings per share (EPS) and $767 million in revenue. That compared with consensus estimates of $1.00 in EPS and $736.5 million in revenue, as well as the $1.00 per share and $720 million posted in the same period of last year.

During the most recent quarter, the company reported daily average revenue trades (DARTs) of 267,000, including 36% in derivatives, a company record of 95,000 derivative DARTs.

Also in this time, E*Trade opened 47,000 net new accounts.

The board of directors declared a quarterly cash dividend of $0.14 per share on outstanding shares of common stock. The dividend is payable on November 15, to shareholders of record as of the close of business on November 8. On an annualized basis, the dividend yield comes out to roughly 1.4%.

CEO Mike Pizzi commented:

This past quarter was marked by record net revenue, strong operating results and customer engagement, as well as a myriad of accolades for the intuitive experience we deliver to our customers time and again. The commission changes over the past few weeks have caused a meaningful shift for the industry—making it even more crucial to deliver a cutting-edge and easy-to-use experience to investors and traders alike. As a digital-first company, backed by one of the most sophisticated customer support teams in the industry, we will leverage our advantage to grow and take share, especially as price is removed as a point of competitive differentiation. Our business is well positioned for the long-term, and we will remain dynamic, optimizing our model in a manner that best delivers long-term value for shareholders.

Shares of E*Trade traded up about 5% on Friday to $40.93, in a 52-week range of $34.68 to $54.44. The consensus price target is $41.20.

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