You're Missing Out on E*TRADE

Don't look now, but E*TRADE Financial (Nasdaq: ETFC  ) is back.

Shares of the Web-savvy discount broker opened 5% higher this morning after the company posted better-than-expected results. Earnings clocked in at a healthy $0.22 a share. There was a juicy one-time tax benefit padding results, but even the adjusted profit of $0.13 a share is well ahead of the $0.09 a share that Wall Street was banking on. It's also a welcome reversal to the small loss it posted during last year's first quarter.

What's the big deal? Don't companies find ways to land ahead of the pros more often than not? Well, this is the first time that E*TRADE has surpassed analyst expectations since the first quarter of last year.

E*TRADE also stands out against its peers. Charles Schwab (NYSE: SCHW  ) , TD AMERITRADE (Nasdaq: AMTD  ) , and Interactive Brokers (Nasdaq: IBKR  ) all reported quarterly reports this week ahead of E*TRADE's release last night. How did they hold up against Street projections on the bottom line?

Company

EPS

EPS Estimate

E*TRADE $0.13 $0.09
Charles Schwab $0.15 $0.15
TD AMERITRADE $0.25 $0.25
Interactive Brokers $0.30 $0.33

Source: Yahoo! Finance.

E*TRADE was the only one of the four to best the prognosticators.

Fundamentally speaking, E*TRADE is also on the rise.

E*TRADE added 46,000 net new brokerage accounts during the first three months of the year. There are now 4.4 million customer accounts, including 2.8 million brokerage accounts. There are $202 billion in total customer assets, ahead of the $189 billion a year earlier. The number of daily average revenue trades of 157,000 may be an 11% decline from last year's activity, but it's also a welcome 12% increase sequentially.

E*TRADE's $12.4 billion loan portfolio will continue to be a storm cloud over the company, though its provision for loan losses shrank sharply this past quarter.

It was easy to criticize the discounter for deciding not to seek a sale of the company late last year, but E*TRADE is also proving why it can grow just fine on its own.

E*TRADE's back -- and not just because today's strong report has returned the shares back into the double digits where they belong.

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Motley Fool newsletter services have recommended buying shares of TD AMERITRADE, Charles Schwab, and Interactive Brokers Group, as well as creating a bull put spread position in TD AMERITRADE. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

Longtime Fool contributor Rick Munarriz calls them as he sees them. He does not own shares in any of the stocks in this story. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.


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