E-Trade Financial falls shy of earnings estimates in the first quarter

E-Trade Financial Corp. (NASDAQ: ETFC) dropped around 1% in the after-hours trading on Thursday as the company released quarterly financial results that printed its earnings below the consensus estimate.

The electronic trading platform announced its net income (common shares) in the first quarter at £130 million that translates to 58 pence of earnings per share and was sharply lower than £218 million (88 pence of earnings per share) that it recorded in the same quarter last year.

In the first quarter last year, E-Trade Financial reported its revenue at £610 million. In the recent quarter, its revenue saw a significant decline of 6.4% to £571 million instead.

According to FactSet, experts had forecast the company to print £581 million in revenue in the first quarter. Their estimate for earnings per share (EPS) was capped at 73 pence per share.

E-Trade To Pay 11 Pence A Share Of Dividend On May 19th

Despite the downbeat performance, the financial services firm declared 11 pence per share of dividend for its investors payable on May 19^th. In the second quarter, analysts estimate the company to make £504 million worth of sales and earn 54 pence per share.

E-Trade’s report on Thursday also highlighted the company to have added 363,000 new accounts in the recent quarter. It also valued its net assets (interest-earning) at £46 billion with 282 basis points of net interest margin. Additionally, its net assets involving retail & advisor services were valued at £14.50 billion in Q1.

The Morgan Stanley subsidiary’s DARTs (daily average revenue trades) came in at 652,000 in the first quarter while derivative DARTs were reported even higher at 186,000. In terms of capital return to its investors, the company noted £102 million including £25 million in dividends and £77 million worth of share buybacks.

E-Trade’s Performance In The Stock Market

At £31 per share, E-Trade is currently around 18% down year to date in the stock market. In comparison, the benchmark S&P 500 index is roughly 15% down in 2020 so far.

In late March, the financial services company dropped to as low as £22 per share but recovered quickly in the subsequent months. Its performance in 2019 was reported almost flat on average in the stock market.

At the time of writing, E-Trade Financial Corp. is valued at £6.83 billion and has a price to earnings ratio of 9.94.