Online brokerage E*Trade Financial Corp. (ETFC) on Thursday reported a loss for the fourth quarter that widened from last year, reflecting reflecting lower revenues and a hefty loss related to debt extinguishment. Loss per share for the quarter was wider than analysts' estimates. Shares of the company declined more than 4 percent in extended trading.
The latest-quarter results included a pre-tax loss of $257 million on early extinguishment of debt after the company refinanced $1.3 billion of corporate debt.
E*Trade's net operating interest income for the fourth quarter declined 10 percent from last year to $260.23 million, reflecting net interest spread of 2.38 percent on average interest-earning assets of $42.9 billion. Meanwhile, total non-interest income grew 12 percent from the year-ago period to $207.43 million.
Provision for loan losses for the quarter was $74.10 million, down 40 percent from $123.04 million in the year-ago quarter.
Daily average revenue trades or DARTs decreased 9 percent from the year-ago period to 128,000. Net new brokerage accounts were 10,000 during the quarter, flat with the prior-year quarter. Net new brokerage assets totaled $2.3 billion, up from $1.7 billion in the year-ago period.
E*Trade ended the quarter with $201.2 billion in total customer assets, up 17 percent from $172.4 billion at the end of the year-ago quarter.
At quarter end, the company reported 4.5 million customer accounts, up 4 percent from the end of prior-year quarter. This includes 2.90 million brokerage accounts and 1.15 million stock plan accounts.
E*Trade's fourth-quarter net loss widened to $186.06 million or $0.65 loss per share from $6.35 million or $0.02 per share in the year-ago period.
On average, sixteen analysts polled by Thomson Reuters expected the company to report loss of $0.54 per share for the quarter. Analysts' estimates typically exclude special items.
During the quarter, E*Trade's income tax benefit included about $38 million of expense related primarily to a recent change to the California tax code and its impact on certain state deferred tax assets.
Net revenue for the quarter declined 2 percent to $464.66 million from $475.01 million in the same period last year. Analysts had a consensus revenue estimate of $476.53 million.
For fiscal 2012, E*Trade's net loss was $112.58 million or $0.39 per share, compared to net income of $156.70 million or $0.54 per share in the previous year. Net revenue for the year declined 7 percent to $1.90 billion from $2.04 billion in the prior year.
Analysts expected the company to report loss of $0.30 per share for the year on revenues of $1.91 billion.
EFTC closed Thursday's regular trading session at $10.27, down $0.03 or 0.29 percent on a volume of 9.04 million shares. In after-hours, the stock further declined $0.44 or 4.28 percent to $9.83.
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