TD AMERITRADE & E*TRADE, Brace For Earnings (ETFC, AMTD, SCHW)

On Thursday, we’ll get to see earnings out of TD AMERITRADE Holding Corporation (NASDAQ: AMTD) and E*TRADE Financial Corporation (NASDAQ: ETFC).  In fact, that will already mark the actual end of the discount brokerage firms and their earnings trifecta as Charles Schwab Corp. (NASDAQ: SCHW) already posted its earnings on Tuesday.

The estimates for the TD AMERITRADE from First Call are $0.31 EPS on $615.66 million in revenues.  Next quarter estimates are $0.32 EPS on $ 603.41 million in revenues. Estimates for fiscal Sept-2008 are $1.34 EPS on $2.45 billion in revenues.

Analysts have an average price target north of $21.00 and TD America’s 52-week trading range is $13.82 to $21.31.  Joe Moglia & Co. shares closed up over 3.5% at $17.58 Wednesday.

The estimates for the E*Trade from First Call are -$0.10 EPS on $ 363.94 million in revenues.  Next quarter estimates are -$0.03 EPS on $ 404.16 million in revenues. Estimates for fiscal Dec-2008 are -$0.12 EPS on $1.65 billion in revenues.

Analysts have an average price target north of $4.30 and E*Trade’s 52-week trading range is $2.08 to $25.79.  Anything toward that higher half or double-digits may be irrelevant for now, but we have had this under close review for our weekly "10 Stocks Under $10" letter because we think this one might not be able to stay independent forever.

As far as which earnings report will be better, it is actually an easy call.  Joe Moglia didn’t have the same financial asbestos that E*Trade had, but the one with the most leveraged opportunity will probably be E*TRADE.  E*TRADE has been having a rough week as investors are probably bracing for more excuses that more financial asbestos was found in the lunch room, but that really should be expected and anything "not bad" should be met with relief.

Yesterday, Charles Schwab Corp. (NASDAQ: SCHW) reported earnings that met analyst estimates. Profit rose by 12% to $305 million for EPS of $0.22 on $1.3 billion in revenues. Shares rose after its earnings on Tuesday by $1.22 yesterday to $19.95.  Charles Schwab’s 52-week range is $17.41 to $25.72.

Jon C. Ogg
April 16, 2008

Jon Ogg produces the Special Situation Investing Newsletter.  He can be reached at [email protected] and he does not own securities in the companies he covers.