E+Trade swings to profit, continues slow recovery
E+Trade Financial Corp. (ETFC-Q) swung to a profit in the first quarter, beating expectations.
Loan loss provisions fell 40 percent from the previous quarter to $116 million US, suggesting E+Trade is more confident about its mortgage loan performance, and the U.S. economy.
Daily trading, meanwhile, jumped 14 percent from last year, as unrest in North Africa and the earthquake and tsunami in Japan roiled markets and spurred E+Trade's retail investors.
The company's shares jumped 3.5 percent to $16.47 in after hours trading Wednesday, their highest level in two months.
E+Trade reported a net profit of $45 million, or 16 cents a share, compared with a loss of $48 million, or 25 cents, a year ago.
Revenue was unchanged at $537 million.
Analysts on average expected E+Trade to earn 12 cents per share on $389 million of revenue, according to Thomson Reuters I/B/E/S.
In the fourth quarter, E+Trade surprised analysts with a loss, suggesting the stumbling mortgage market recovery was continuing to hamstring its banking unit.
But things looked better in the latest quarter.
Loans in E+Trade's home equity portfolio that were 30 to 89 days delinquent, seen as the company's greatest exposure to loan losses, fell 11 percent from the previous quarter.