To: TLindt who wrote (3361 ) 7/21/1998 8:52:00 PM From: Robert Giambrone Read Replies (1) | Respond to
E*TRADE GROUP (EGRP) 32 -1/4. Earnings per share have stagnated, but the goal at E*Trade is to become an Internet portal. In the third fiscal quarter (Jun), earnings per share were $0.16, in-line with expectations, and flat with the year ago $0.16 per share operating (the press release doesn't make that at all clear, and prefers to emphasize the $0.09 per share actual with charges). The three prior quarters were $0.15, $0.12 and $0.15 per share, showing that the earnings trend is flat to up very modestly. Most interesting, though, you have a long way to read into the press release before you realize that EGRP is a stock broker. The comments from the CEO start off "Our excellent financial performance was spurred by a surge in activity on our Web site. Measured by traffic, E*TRADE is now one of the top three financial service destinations on the Internet." The press release continues: "Total page views at the E*TRADE Web sit jumped to an average of 2.2 million per day, up 57% from 1.4 million per day in the second quarter." This is the way search engine press releases read, not Charles Schwab's. EGRP has long talked about becoming an Internet portal, and they are very serious about it. However, the Destination E-Trade is well behind schedule and recent press reports indicate it will be several more months before launch. Destination E-Trade is intended to provide free financial information with some subscription services. Plans also include adding mortgages, credit card, bill payment, and merchandise. "We want to be bookmarked as an all-in-one financial portal," CEO Cotsakos is quoted as saying in a recent article in The Industry Standard. EGRP recently got a potential boost in that direction when Softbank invested $400 to get a 27.2% stake in EGRP. Softbank has major investments in Yahoo, GeoCities, and other sites with which EGRP may make alliances. That may happen, but EGRP isn't a portal yet, and it will be tough to turn this company into an information company as well as a stock broker. If they pull it off, the multiples on the stock may leap, but until then, profits have hit the wall.
