JERSEY CITY, N.J., Feb 29 (Reuters) - National Discount Brokers Group Inc., which owns a share-dealing firm and online brokerage, said on Tuesday it expects third-quarter sales and earnings to set a record and "substantially exceed" Wall Street estimates, thanks to record trading volume.
National Discount (NYSE: NDB) shares surged 29 percent, or 9-1/16, to 40-1/16 on the news, topping the New York Stock Exchange list of the day's strongest performers.
"It will be our best quarter yet," Chief Financial Officer Daniel Fishbane told Reuters.
The Jersey City, N.J.-based broker, whose stock-trading Web site was shut down briefly last Thursday by an apparent attack by computer hackers, said it expects record operating profits of $0.95 to $1.05 a share and record revenues of $125 million to $135 million for the quarter, ended Feb. 29.
Analysts had expected an operating profit of just 8 cents per diluted share, according to Wall Street tracking service First Call/Thomson Financial.
"It is a fantastic number and a testimony to strong volumes in the quarter and increased operating leverage inherent in the brokerage business model," Jim Marks, an analyst at Credit Suisse First Boston, said. "This is stunning."
Stock trading is booming at Wall Street brokerages this quarter as the longest bull market in U.S. history continues to lift stock market daily volumes to new record highs. As investors shower trading desks with buy orders, broker stocks have jumped in the past few weeks.
"The anticipated record earnings...is the result of record volume in the market, which created trading opportunities for Sherwood Securities, as well as continued growth of NDB.com's brokerage business in terms of new account acquisition and trading activities," National Discount Chief Executive Arthur Kontos said in a statement.
Fishbane declined to provide further details.
Online brokers have repeatedly beaten earnings estimates by a wide margin. Although some analysts expect another record year for the industry, they have yet to update their earnings forecasts.
Earlier this month, National Discount said its online brokerage unit, NDB.com, had 200,000 customer accounts.
In December National Discount reported lower second-quarter earnings. At the time, it said it would spend heavily on new offices and technology in the months ahead. It also said it would spend more on advertising to lure customers. |
