E TRADE Financial Corporation (NASDAQ:ETFC) will report its fourth quarter and full year 2013 financial results after the close of the U.S. financial markets on Thursday, January 23, 2014. The Company will host a conference call to discuss the results at 5:00 p.m. EST.
Wall Street anticipates that the discount broker will earn $0.19 per share for the quarter, which is way, way better than last year's loss of $0.65 per share. iStock expects the financial services company to beat Wall Street's consensus number. The iEstimate is $0.20; a penny better than the street's outlook.
E TRADE is a financial services company, which provides online brokerage and related products and services primarily to individual retail investors under the brand E*TRADE Financial. The Company also provides investor-focused banking products, primarily sweep deposits and savings products, to retail investors.
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Much like many investors' trading accounts, E Trade's recent earnings history has been checkered with some winners and spectacular losers. In the last four years, the company has topped the street's expectations a half-dozen times by an average of 65% with a range of 18.18% to 209%.
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Meanwhile… ETFC missed six times by -20.37% to -900%. All-in-all, the average bearish surprise was -334.92%. – making for cringe worthy headlines.
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Despite E TRADES crazy, home run or strikeout earnings record, the earnings-driven stock performance has a strong history of rewarding investors. In the three days circling the EPS announcement, shares have moved up an average of 8.69% for 10 of the last 16 quarters. The trade turned in as little as a 2.10% return and topped out at 28%.
That leaves six times when ETFC faltered for disappointing investors. The stock backed up an average of -7.10% for the half-dozen red reaction with a range of -1.60% to -14.40%.
The key metric for discount brokers is Daily Average Revenue Trades (DARTs). On this account, the financial service company is rolling. October 2013 DARTs were up 8.6% compared to September 2013 and increased 28.5% versus October 2012.
November DARTs built on October's success by adding 2.3% and smoking November 2012 by 25.5%. The discount trading business is booming, which is what you would expect in a year that went straight up.
On Tuesday, January 21, 2014, competitor TD Ameritrade Holding Corp. (NYSE:AMTD) released earnings and reported, "DART numbers are at levels we've not seen in over two years." By our calculations, AMTD's Daily Average Revenue Trades increased at approximately 7.43% quarter-over-quarter.
Depending on December, iStock expect to see similar numbers from E TRADE, which would probably translate into an EPS surprise that tops the iEstimate.
Overall: E TRADE Financial Corporation (ETFC) EPS price-sensitivity and robust business suggests strong results and a possible winning trade Thursday afternoon.
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