"Hey, Max," the confined E*TRADE Baby says to his dog after Max fails to alert him that his mother is coming in one of last year's popular ads. "Would it kill you to throw a guy a warning bark?"

How about it, E*TRADE (Nasdaq: ETFC)? Would it kill you to throw a guy a warning bark?

The discount broker posted an unexpected fourth-quarter deficit last night, breaking up a welcome run of back-to-back quarters of profitability.

E*TRADE's loss of $0.11 a share for the period is a healthy improvement from the $0.36 a share it bled a year earlier, but analysts were banking on a profit of $0.04 a share.

The discounter surprised investors with its first quarterly profit in three years six months ago. Three months later it delivered an encore performance.

E*TRADE posted slight dips in revenue and trading activity, but that isn't a surprise after larger rivals Charles Schwab (Nasdaq: SCHW) and TD AMERITRADE (Nasdaq: AMTD) posted ho-hum daily average revenue trades for the same quarter last week.

Dig a little deeper, and E*TRADE's quarter wasn't all that bad. Back out $15 million in severance and restructuring charges along with a one-time $60 million increase to the qualitative component of its loan loss reserve to account for its loan modifications and E*TRADE would've been back in black.

Other positives include a reduction in delinquencies and a growing account base. E*TRADE closed out 2010 with 4.2 million customer accounts. The $176 billion in total customer assets is nearly 17% higher than the $151 billion under its watch a year ago.

These remain challenging times for the brokerage space. Falling commission rates, an industrywide trend of offering commission-free exchange-traded funds, and a low interest rate environment made it a difficult for discounters to grow their bottom lines. E*TRADE's turnaround was a rare bright spot. It also doesn't help that brokerage customers aren't trading the way they were when stocks began rallying in 2009.

Thankfully, even the pros think it will get better. Analysts see Schwab, TD AMERITRADE, optionsXpress (Nasdaq: OXPS), E*TRADE, and Interactive Brokers (Nasdaq: IBKR) all posting higher earnings this year.

Fickle or spooked traders can always crash that party, but the market wouldn't be what it is if it were boring and predictable.

You get a free pass this time, Max. No warning bark required.

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