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Web broker in 1Q warning
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September 3, 1999: 10:11 a.m. ET
National Discount Brokers says revenue lower than expected, reducing net
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NEW YORK (CNNfn) - Shares of National Discount Brokers Group, Inc. dropped in early trading Friday after the company announced that fiscal first-quarter earnings and revenue would fall short of expectations.
Just after markets opened Friday, National Discount Brokers (NDB) fell 4-1/4, or more than 13 percent, to 27.
National Discount Brokers, an online brokerage based in Jersey City, N.J., announced late Thursday it expected a revenue shortfall of about 4 percent from analysts' expectations of $55 million for the quarter ended Aug. 31.
The lower revenue mean the company will report results anywhere from earnings of 2 cents per share to a loss of 1 cent per share during the quarter. The First Call consensus of analysts' estimates put the broker's earnings at about 21 cents per share.
The company said its expenses would be about 9 percent greater than they had originally expected, due mostly to expenses related to its advertising campaign, write-offs of obsolete equipment, and software upgrades.
Additionally, charges related to increased transactions at its Sherwood Securities subsidiary also pressured the firm's bottom line.
On the bright side for the company, its retail accounts for the quarter increased 13 percent to 159,000 from 141,000 during the previous quarter.
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