ETrade Reports Smaller Loss
NEW YORK (AP) _ ETrade Group Inc. reported a smaller-than-expected first-quarter loss Wednesday as it added 330,000 customers in three months.
For the period ending Dec. 31, the nation’s second-largest Internet brokerage behind Charles Schwab reported a loss of $5.2 million, or 2 cents a share, compared to a loss of $11.6 million, or 5 cents a share for the same period a year ago.
The latest three-month figures include a number of one-time gains related to various investments. Excluding those gains, the company lost $38.1 million, or 15 cents a share.
Wall Street analysts had expected ETrade to lose 21 cents a share, according to First Call/Thomson Financial.
First-quarter revenues came to $246 million, up from $116 million a year earlier.
Analysts attributed the company’s losses to its high advertising costs, which ETrade deems necessary in the increasingly competitive market for online investors.
The brokerage has also employed a costly strategy of reaching out to smaller investors, many of whom were shunned by rival online brokerages. Company executives said that strategy will position it well for the future as those investors make more money and invest more.
ETrade now manages customer accounts totaling $44.1 billion, up from $15.2 billion a year ago.
In addition, the company reported an average of 133,000 transactions every day, a 208 percent jump from the same time last year and a 65 percent increase over the previous quarter.
ETrade shares fell $1.75 to $26.18 3/4 in trading on the Nadaq stock market.