=-= Monday July 12, 1999,,,Earnings of AMTD(before open), AMGN, VTSS
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NEW YORK (CBS.MW) -- Ameritrade on Monday reported record fiscal third-quarter revenue and said average trading volume rose 14 percent over the second quarter to 59,648 trades per day.
The online broker (AMTD: news, msgs) posted net income of $8.9 million or 5 cents a share, 2 cents ahead of the First Call consensus estimate, and ahead of profits of the $5.9 million, or 3 cents a share a year ago.
The 14-percent increase in trading volume was larger than some analysts had expected. Declining trading volumes on the Nasdaq stock market in particular in May and June indicated that the online brokers would fall well short of the astounding volume growth in the first quarter.
With Ameritrade coming in at 14 percent -- boosted by solid account growth -- some analysts are now expecting the industry may post some surprises.
"I thought that the trading activity in the first calendar quarter was unsustainable," said Rich Repetto, industry analyst at Lehman Brothers who had been expecting a 6-percent increase in average daily trading volume from Ameritrade.
"This bodes well for E-Trade," he added. He's expecting an 11 percent in E-Trade's volume. Year-over-year, Ameritrade's daily trading volumes are up 179 percent.
Setting the tone
Ameritrade's earnings are likely to set the tone for leading online brokers. E-Trade (EGRP: news, msgs) and Charles Schwab (SCH: news, msgs) traded lower, in line with the lower Internet stocks. Ameritrade's stock fell 2 1/16 to 36 1/16 in choppy trading.
The e-brokerage stock slippage Monday morning wasn't surprising, said Ken Schapiro, president of Condor Capital Management, "when you look at the monster move these (e-broker) stocks have made over the last nine months."
Schapiro, whose firm has some $5 million in Schwab stock after recently trimming its holdings in the discount giant recently, said "huge growth is priced into these stocks already."
Credit Suisse First Boston analyst Bill Burnham last week estimated online trading industry volumes grew about 15 percent in the second quarter vs. 47 percent growth in the first quarter and 34 percent growth in the fourth quarter last year. See full story.
Ameritrade posted 8.1 trades per average account in the third quarter, said Repetto, revising an earlier figure. Trades per average account were at 7.7 in the second quarter.
Pay cut for Stuart the office boy?
Revenue jumped 97 percent to $78 million, the company said. Ameritrade said it opened 84,000 new accounts in the quarter, an 18 percent increase from the fiscal second quarter. Assets in customer accounts reached $22.6 billion, a 16-percent increase from the second quarter.
Advertising spending, while still greater than last year, is on a decreasing trend, results indicate. The brokerage spent $12.1 million in the third quarter on ads vs. $5.2 million a year ago. In the fiscal second quarter, ad spending was $13.2 million, Ameritrade officials said.
Ameritrade's acquisition cost per account is at $159 year to date, and stood at $144 in the third quarter. "We will continue to seek creative and cost-effective ways to increase our customer base," said Co-CEO Tom Lewis.
Last month, Ameritrade filed to sell more shares to raise up to $250 million and said it could use part of the funds to acquire "businesses or assets." Lehman Brothers is an advisor in that deal.
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Monday July 12 7:21 PM ET
Amgen Posts Higher-Than-Expected Earnings
By Deena Beasley
LOS ANGELES (Reuters) - Biotechnology company Amgen Inc. (Nasdaq:AMGN - news) Monday posted better-than-expected earnings for the second quarter, citing strong sales of its two lead drugs, Epogen and Neupogen.
Another big California biotech firm, Genentech Inc., also reported strong second-quarter sales, but it lost $923 million, or $7.19 a share, after accounting for $1.14 billion in charges related to Roche Holding AG's decision to purchase the 33 percent of Genentech it did not already own.
Thousand Oaks, Calif.-based Amgen also forecast its full-year earnings would beat current Wall Street estimates, and said it would file by the end of the year for U.S. approval of a new arthritis drug, IL-1ra.
The company said its net income for the quarter rose 24 percent to $268 million from $216 million a year ago, while earnings per share rose 22 percent to 50 cents from 41 cents. Analysts had expected the company to earn 46 cents a share, according to First Call Corp., which tracks such estimates.
Total product sales rose 21 percent to $738 million from $611 million, Amgen said.
Amgen also said it now expected its earnings per share for the full year to be at the high end of a range of $1.90 to $1.95 -- above Wall Street's current consensus of $1.85.
The earnings and arthritis drug news helped send Amgen stock up $4.94 to $71.25 in after-hours trading. In regular Nasdaq trading, Amgen had lost $3 to $66.31.
''The Street really misread it. They had a fabulous quarter,'' said Charles Engelberg, an analyst at AmeriCal Securities.
Amgen had planned to report its earnings July 22, but said it moved the date forward because of higher-than-normal trading volume in its stock last week.
Analysts also were encouraged by Amgen's plans to file for U.S. approval by the end of this year of its rheumatoid arthritis product known as IL-1ra. Clear-cut results from interim trials of the drug mean that an additional phase 3 trial will not be necessary, Amgen said.
''Il-1ra is in the same class as Immunex's extremely well-selling Enbrel,'' Engelberg said. ''Amgen is often accused of not having one of the best pipelines, but this sort of news changes that perception.''
Amgen said sales of Epogen, used by kidney dialysis patients, rose 27 percent to $428 million, while sales of Neupogen, used by cancer and AIDS patients, rose 12 percent to $304 million.
For the full-year, Amgen said it expected total product sales growth to be in the high teens, with Epogen sales growth in the mid-20 percent range and Neupogen sales growth in the high single to low double-digit range.
''We now have four late-stage product candidates, and we are hopeful that they will gain regulatory approval over the next several years, providing important benefits to patients and fueling our company's continued growth,'' Amgen Chairman Gordon Binder said in a statement.
For its part, Genentech said it earned $73.2 million, or 55 cents a share before the charges, compared to $40.4 million, or 31 cents, in the year-earlier period. Revenues rose to $375 million from $268 million.
The company said second-quarter sales of its breast cancer drug Herceptin rose to $46.2 million from $30.5 million in the fourth quarter of 1998, when the drug was launched.
Genentech also said second-quarter sales of Rituxan rose to $74.4 million from $34.8 million in the same 1998 period, due mostly to increased use of the antibody to treat non-Hodgkin's lymphoma, a form of cancer.
Genentech's shares were delisted after the Roche deal on June 30, but the Swiss company plans to spin-off 19 percent of the South San Francisco, Calif.-based firm, possibly by later this summer.
================== VTSS, 1c above ==================
Revenues in the third quarter of fiscal 1999 were $73 million, an increase of 58 percent over the $46.1 million in the third quarter of fiscal 1998, and an increase of 9 percent over the $66.9 million in the second quarter of fiscal 1999.
Net income for the third quarter of fiscal 1999 was $19.4 million, or $0.24 per share (taxed at 33 percent), compared with net income of $13.9 million, or $0.18 per share (taxed at 20 percent), in the third quarter of fiscal 1998, and net income of $17.6 million, or $0.22 per share (taxed at 33 percent), in the second quarter of fiscal 1999.
For the nine-month period ended June 30, 1999, revenues were $200.1 million, a 65 percent increase over the $121 million recorded in the nine-month period ended June 30, 1998. Net income for the nine- month period ended June 30, 1999, was $52.5 million, or $0.64 per share (taxed at 33 percent), compared with $36.4 million, or $0.46 per share (taxed at 20 percent), for the nine-month period ended June 30, 1998.
Vitesse President and Chief Executive Officer Lou Tomasetta said: "I am pleased to report another successful quarter in which we set records for revenues, operating profit and net income. We saw continued strength in our focus areas, particularly in the Fibre Channel market. Our manufacturing groups continued to ramp up production volumes in order to meet our growing demand."
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