Interesting view on the expensing profit to cut taxes.
Here are two articles on EGRP making a profit this 3rd quarter.
ecommercetimes.com
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sfgate.com
E-Trade Manages Earnings
Sam Zuckerman, Chronicle Staff Writer
Thursday, July 20, 2000
Online brokerage giant E-Trade Group eked out a
small profit in the June quarter despite slower
account growth and a drop in trading volume from
the previous period.
The No. 2 online broker said yesterday it earned
$5.69 million (2 cents a diluted share) in the three
months ended in June, its third fiscal quarter,
compared with a loss of $23.8 million (8 cents a
share) in the comparable period a year ago.
Shares of Menlo Park's E-Trade slipped 19 cents
to $17.75 yesterday after earnings were announced.
The latest quarterly results for E-Trade, as well as
those of rival online brokers, reflect last year's
stunning rise in the popularity of investing on the
Internet, followed by a pullback after the
technology-laden Nasdaq stock market plunged
several months ago.
``When you're in a period of severe market
volatility, people step out and stand on the
sidelines,'' said Mitchell Caplan, chief of E-Trade's
banking unit.
E-Trade's revenue jumped to $330.3 million, up 77
percent from the June 1999 quarter, but was well
below the record $407.4 million recorded in this
year's March quarter.
Other key measures also showed slowing growth
during the March-to-June quarter. Net new
accounts increased 330,545 to 2.94 million,
compared with 603,000 new accounts in the
previous quarter.
In addition, E-Trade handled an average of
169,000 transactions each day, down from an
average of 229,000 in the previous quarter.
Still, E-Trade's performance was respectable,
analysts said, given the impossibility of sustaining the
growth levels that it feasted on when a bull market
was raging. The company ``didn't knock the cover
off the ball, but they hung in there pretty well,'' said
Matthew Vetto, an analyst with
SolomonSmithBarney in New York.
Persuading customers to move assets to E-Trade
has been one of the company's top priorities during
the past year. In the most recent quarter though,
assets grew more sluggishly than expected, Vetto
said.
The company drew in $7.6 billion in new assets
from customers after subtracting withdrawals,
compared with $10 billion in the March quarter.
Slower growth combined with plunging stock prices
pushed E-Trade's total customer assets down 6.9
percent to $60.7 billion from March to June.
The company managed to post a profit by cutting
back on its near-saturation advertising. Marketing
costs during the June quarter were $115 million,
down 35 percent from the previous period.
E-Trade's results in the most-recent quarter were
also boosted by the company's diversification into
new business areas, such as banking and money
management, in order to buffer itself from volatile
brokerage results.
In the June quarter, E-Trade's brokerage accounts
grew 11.4 percent to 2.7 million. But accounts at
E-Trade Bank, which the company bought at the
beginning of the year and began promoting in April,
jumped 30.5 percent to 222,582.
E-mail Sam Zuckerman at
szuckerman@sfgate.com. |
