E*TRADE Beats Earnings, Revenue Estimates for 2Q17

E*TRADE (ETFC) reported strong 2Q17 results by reporting earnings per share (or EPS) of $0.52, which beat the analysts’ estimate of $0.48. These results are mostly due to an increase in the company’s derivative trades and increasing customer activities. 

The company reported revenues of $577.0 million in 2Q17, beating analyst estimates on revenues of ~$553.6 million. Let’s have a look at the revenues posted by E*TRADE’s competitors:

• Charles Schwab (SCHW): ~$2.1 billion
• Gain Capital Holdings (GCAP): ~$98.0 million
• Interactive Brokers Group (IBKR): ~$380.0 million

E*TRADE posted net income of $193.0 million in 2Q17 compared to net income of $133.0 million in 2Q16, reflecting an increase of ~45.1%. The company posted net interest income of $356.0 million in 2Q17 compared to $286.0 million in 2Q16. 

However, E*TRADE witnessed a substantial decline in its commissions from $127.0 million in 1Q17 to $105.0 million in 2Q17. This decline led to a decrease in the total non-interest income from $234.0 million in 1Q17 to $221.0 million in 2Q17.

E*TRADE (ETFC) has operating cash flow of ~$1.5 billion on a trailing-12-month (or TTM) basis. Other brokerage giants (XLF) have the following operating cash flows on a TTM basis:

• TD Ameritrade (AMTD): ~$1.1 billion
• Charles Schwab (SCHW): ~$1.7 billion
• Interactive Brokers Group (IBKR): $0.83 billion