E+Trade Profit Down, Revenue Up

Online banking and brokerage firm E+Trade Financial Corp. (ETRD), said on Wednesday its fourth-quarter profit fell, as daily average revenue trades fell, but net revenue rose 10 percent.

Net income fell to $98.4 million, or 26 cents per share, from $107.5 million, or 27 cents per share, in the year-earlier period, when the company realized a one-time gain on the sale of some investments. The 2004 quarter included a benefit from a lower corporate tax rate of 2 cents a share.

Analysts polled by Reuters on average expected E+Trade to earn 22 cents a share.

Net revenues rose 10 percent to $409.5 million from $371.3 million a year earlier, and was 21 percent higher than the third quarter.

Total daily average revenue trades (search), or DARTs, fell to 136,133 from 140,126 last year, but were up 40 percent from the third quarter.

As of Dec. 31, E+Trade's total assets topped $31 billion, while the company added 61,000 net new brokerage accounts.

"We're very happy with the results," R. Jarrett Lilien, E+Trade's Chief Operating Officer said in an interview.

He added that the company expected DARTs to rise within a range of 135,000 to 150,000 during 2005, even though the company is not anticipating much in the way of market gains.

"We are not expecting a lot from the marketplace ... but our success is not dependent on just the market," Lilien said. "We still expect our business segment earnings to be up 15-37 percent, even though we are not expecting that much out of the market.

Last week, Charles Schwab Corp. (SCH), the largest U.S. discount brokerage and an E+Trade competitor, said its quarterly profit fell sharply, although its earnings before restructuring charges beat expectations.

E+Trade's Lilien said that "When the markets are up we want to be up more than the competition, and when markets are down we want to be down less than the competition," he said.

"We can't control markets but can control market share," Lilien added.

Shares of E+Trade, listed on the New York Stock Exchange (search), fell by more than 3 percent to trade near $12.94.