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E*TRADE’s Q2 Daily Average Revenue Trades Fell Sequentially

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E*TRADE exceeded EPS estimates

E*TRADE Financial (ETFC) released its second-quarter earnings on July 19. The brokerage firm posted EPS of $0.95, which beat Wall Street estimates by $0.07. E*TRADE ended the second quarter with daily average revenue trades (or DARTs) of 258,844, which implies a sequential decline of 16%. The fall was mainly due to lower fluctuations in the broader equity markets. However, the company’s second-quarter DARTs rose 24% year-over-year.

Interactive Brokers Group (IBKR) saw DARTs of 797,000 in the second quarter. During the same period, Charles Schwab’s (SCHW) trading revenues were $180 million.

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In the second quarter, E*TRADE Financial’s net interest margin was 302 basis points, a rise of five basis points on a sequential basis. This growth was mainly driven by the rise in average margin balances, interest rates, and investment yields. On a YoY basis, the second-quarter net interest margin implies a rise of 28 basis points on a YoY basis.

ETFC’s second-quarter revenues

In the second quarter, E*TRADE Financial generated revenues of $710 million, which beat analysts’ predictions by $3.4 million. The company’s second-quarter revenues reflect a marginal rise on a sequential basis, as first-quarter revenues were $708 million.

E*TRADE Financial garnered commissions of $121 million in the second quarter, which reflects a decline on a sequential basis mainly because of the fall in DARTs. However, in Q2 2017, the commissions were $105 million. TD Ameritrade Holding (AMTD), one of E*TRADE’s competitors (VFH), is scheduled to report June quarter earnings at the beginning of next week.

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