Ho-hum. By now, it's hardly surprising when an online brokerage like E*Trade (NYSE: ET) reports fired-up quarterly profits. We've all noticed that the sector is hot again, largely because of investors' return to the stock market. Today, E*Trade reported profits that quadrupled over the year-ago quarter.
E*Trade reported earnings of $88 million, or $0.23 per share, compared to $21 million, or $0.06 per share, last year. Revenues increased 28% to $411 million. E*Trade also said it now expects 2004 guidance in the range of $0.75 to $0.90 per share, as compared to its old view of earnings of $0.70 to $0.85 per share.
The company added 37,000 new accounts during the quarter. Average trades were 157,000 per day, an 81% increase over this time last year, and 12% higher than last quarter's number.
One recent development that differentiates E*Trade from the rest was its recent triumphant addition to the S&P 500 index. Not too shabby for a company that has an "e" preceding its name in a post-bubble world.
It's a far cry from this time last year, when thoughts of recession and the war in Iraq kept things subdued. At that time, E*Trade talked of its banking operations as a way to sustain profits in both bullish and bearish times.
E*Trade's story today is hardly a fresh one; other online brokerages have been sharing the same upbeat environment. Names in the space, which are all vying for your trades, include Motley Fool Stock Advisor pick Charles Schwab (NYSE: SCH) and Ameritrade (Nasdaq: AMTD).
For now, it's the go-go stock market that's got E*Trade sitting pretty. Boisterous trading has offset the slowdown in mortgages that the company said in its conference call (courtesy of CCBN StreetEvents) came to pass in the fourth quarter. Other growth-oriented strategies on E*Trade's plate include credit cards and commercial loans.
Despite the earnings, E*Trade shares only eked out a 1% gain in recent trading. On the other hand, its share price has tripled over the course of the last year, as many investors made a bet that as soon as the economy improved, active trading would take off once more. It wouldn't be surprising for investors to wonder if there's an end to the rah-rah days in sight. When there's a running of the bulls, nobody wants to be the one who gets trampled.
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Alyce Lomax does not own shares of any of the companies mentioned.
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