E-Trade Q2 Earnings Preview: Transaction-Based Revenues To Drive Results

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ETFC: E*TRADE Financial logo
ETFC
E*TRADE Financial

E*Trade Financial (NASDAQ:ETFC) is scheduled to announce its Q2 2016 earnings on Thursday, July 21. [1]. The company saw a 25% year-on-year (y-o-y) increase in net new brokerage accounts for the quarter to date period, which was mainly due to a favorable comparable period, facilitated by the shutdown of E-Trade’s global trading platform in Q2 2015. However, excluding the effects of the shutdown, the increase in net new brokerage accounts would have still been significant at 17% y-o-y.

Daily average revenue trades (DARTs) at the brokerage remained unchanged in the months of April and May, as compared to the year ago period. However, DART levels were likely significantly higher in June, due to the volatility caused by the UK’s exit from the European Union. This in turn could help E-Trade boost its transaction-based revenues. On the other hand, interest earning assets, which witnessed a gradual increase, are expected to remain flat or even decline due to the likelihood of a delay in interest rate hikes.

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Notes:
  1. E*TRADE Financial Corporation Announces Second Quarter 2016 Earnings Conference Call, E*Trade Investor Relations, July 2016 []