E*Trade Earnings Surge on Tax Benefit, New Accounts

E*Trade Financial Corp. said its first-quarter profit nearly quadrupled, helped by an income-tax benefit and a big increase in new brokerage accounts.

Earnings easily beat Wall Street estimates.

"While economic uncertainty persisted throughout the quarter, our customers remained active while generating healthy levels of new accounts and assets," Chief Executive Paul Idzik said in prepared remarks.

The company ended the period with 3.3 million brokerage accounts, an increase of 45,000 from the prior quarter. That growth accelerated from a net 39,000 added in the first quarter of 2015 and 13,000 accounts gained in the previous quarter.

Customers added $2.9 billion in net new brokerage assets during the period. But partly due to the market volatility at the start of the year, E*Trade ended the quarter with $285 billion in total customer assets, down from $288 billion at the end of the prior quarter and $299 billion a year earlier.

E*Trade's daily average revenue trades declined 3% to 165,000 from a year earlier, but increased 12% from the fourth quarter.

In all, the online broker posted a profit of $153 million, or 53 cents a share, up from $40 million, or 14 cents a share, a year earlier. Excluding an income-tax benefit, earnings were 43 cents a share. Revenue rose 7% to $472 million.

Analysts polled by Thomson Reuters were looking for earnings of 33 cents a share on revenue of $474 million.

E*Trade said its allowance for loan losses was $322 million, down from $353 million in the previous quarter and $402 million in the first quarter of last year.

Rivals Charles Schwab Corp. and TD Ameritrade Holding Corp. reported results in the past week that benefited from increased trading activity among clients.

Write to Lauren Pollock at [e-mail]

(END) Dow Jones Newswires

April 21, 2016 16:25 ET (20:25 GMT)

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