STRATEGIC PARTNERS
January 22, 2003
MENLO PARK, Calif. -- E-Trade Group lowered its profit outlook for 2003, despite posting fourth quarter 2002 net income of $30.4 million, or 8 cents per share, a 41 percent increase from earnings of $21.6 million, or 6 cents per share, in 2001's fourth quarter.
Fourth-quarter 2002 revenue totaled $349.3 million, a 1 percent increase from $345.4 million in the previous year.
If not for accounting items unrelated to its ongoing business, E-Trade said its earnings would have been 14 cents per share. That matched the consensus estimate among analysts polled by Thomson First Call.
However, the company warned of rough times ahead. Noting that it believes that the U.S. economy will continue to be "sluggish" and that economic conditions elsewhere will "remain in a similar or weaker state," E-Trade is projecting earnings from ongoing operations of 45 cents to 55 cents a share for 2003, less than the consensus of 61 cents carried by Multex.
The first quarter is shaping up to be the company's "softest" for the year, E-Trade said.
E-Trade's shares fell 36 cents, or 7.5 percent, to close at $4.46 Jan. 22 on the New York Stock Exchange.
According to a CBS MarketWatch report, E-Trade's flagship brokerage was profitable in the latest quarter, although net brokerage revenue dropped to $218.4 million from the prior year's $229.6 million. Revenue growth came from the banking side of its business, primarily from gains on sales of originated loans.
Active brokerage accounts numbered 3.69 million as of Dec. 31, up 5 percent from the end of 2001, while the average number of brokerage transactions came in at 87,905 a day, down from 113,835.
The company's active banking accounts increased by 4 percent during 2002, to 511,298. Overall, net new accounts slowed to 199,360 last year, down from 443,845 for 2001.
