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E*Trade loses $14.3M in 1Q
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April 20, 1999: 8:35 p.m. ET
Online broker cites heavy technology, ad spending, beats estimates by 5 cents
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NEW YORK (CNNfn) - Internet broker E*Trade Group Inc. Tuesday reported a loss of $14.3 million, or 12 cents per diluted share, in its fiscal second quarter and predicted more losses ahead as it continues to invest in advertising and technology.
E*Trade Group (EGRP), whose stock plunged Monday as part of a widespread technology sell-off on the Nasdaq, earned $4.5 million, or 5 cents per share, in the year-ago period.
Analysts polled by First Call Corp., which tracks earnings reports, predicted a second-quarter loss of 17 cents per share.
Executives credited a fervent marketing push and rising name recognition for E*Trade as the online trading phenomenon gains interest.
"I think it's a combination of two things," Christos Cotsakos, E*Trade's chairman and chief executive officer, said in an interview on "Moneyline News Hour with Lou Dobbs."
"One is a brand that resonates with the online consumer ... and two, a very successful techno-marketing campaign that we have exploited for the last six months," Cotsakos said.
With competition heavy and growing, said Cotsakos, building brand-name recognition for the long haul is more important for E*Trade than is chalking up profit in the near term.
The latest figures don't including results of the sale of the company's interest in Knight/Trimark Securities during the quarter. Including an after-tax gain of $20 million, or 16 cents per diluted share, from the sale, net income for the second quarter totaled $5.8 million, or 5 cents per share.
Net revenues for the latest quarter totaled $126.7 million, an increase of 126 percent over the year-ago period. The online broker said it registered 233,000 new accounts in the quarter, up 77 percent from the first quarter.
For the first half of 1999, the Palo Alto, Calif.-based company lost $27.5 million, or 24 cents per share.
Shares in E*Trade leapt 16 points Tuesday to close at 89-13/16 on the New York Stock Exchange.
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E*Trade Group
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