E*Trade Incurs Q3 Losses in Bid to Eliminate Mounting Debts

The group’s net income during Q3 2015 came in at -$153 million, or $0.53 per diluted share down from $292

E*TRADE Financial Corporation (NASDAQ:ETFC) has reported its financial metrics for Q3 2015, which was underpinned by a net loss in profits, according to an E*TRADE statement.

The group’s net income during Q3 2015 came in at -$153 million, or $0.53 per diluted share. These figures represent a notable decline in net profit from $292 million in Q2 2015, – alternatively, E*Trade yielded $0.99 per share in Q2 2015, down -46.4% QoQ.

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Over a yearly timeframe however, the losses are mitigated, with Q3 2015 showing a 77.9% YoY jump from Q3 2014. Furthermore, revenues came in at $73 million after -$370 million of losses, which were related to debt termination – excluding these charges however, net income would have been $98 million, or $0.33 a share, and revenue would have totaled $443 million.

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During September, E*Trade had revealed its plans to eliminate all of its $4.4 billion of wholesale funding obligations from its bank balance sheet by quarters-end. This ultimately took shape in the form of a capital plan and interest rate tinkering, which was bolstered by shareholder enthusiasm during H1 2015.

In terms of its Daily Average Revenue Trades (DARTs) for Q3 2015, E*Trade reported a figure of 156,000, up 4.7% QoQ from 149,000 in Q2 2015. This period also encompassed a record trading day back in August amidst global growth fears, characterized by 394,000 trades in a single day from its active customer base.

During Q3 2015, E*Trade also added 19,000 net brokerage accounts, down from 25,000 accounts netted in Q2 2015 (-24.0% QoQ). Finally, its total customer assets fell to $276.6 billion in Q3 2015 from $281.7 billion in Q3 2014, down -1.8% YoY.

Despite the lackluster metrics, E*Trade’s shareholders (NASDAQ:ETFC) reacted positively to the release, with the stock presently trading at $27.89 in pre-market trading Friday. The company’s desire to relinquish its debt ultimately charts it on a high trajectory for earnings in Q4 2015, which partly may explain the warm reception garnered from it shareholders.

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