9 replies to this topic

[risktaker]

NEW YORK, Sept 17 (Reuters) - U.S. online brokerage E*Trade Financial Corp on Monday warned that it expected full-year earnings per share to be sharply below its previous forecasts as it increases provisions for bad loans, and writes down the value of some mortgage linked securities.

The brokerage's shares fell 8.5 percent in extended traded after the news.

E*Trade, which plans to exit the wholesale mortgage business, said it expected charges of about $32 million for that and other restructuring moves, most of which will fall in the fourth quarter.

It will streamline its direct mortgage lending business to focus on its retail operations.

E*Trade President and Chief Operating Officer Jarrett Lilien said E*Trade's future balance sheet growth would come from retail assets.

"The market been a catalyst for us to accelerate those plans," Lilien said in an interview. "It's our way of taking a bad credit market and turning it into something positive."

E*Trade said it expects charge-offs of $95 million for loan losses and increased provision expense of $245 million in the second half of 2007.

E*Trade lowered its full-year earnings outlook from a range of $1.53 to $1.67 per share to $1.05 to $1.15 per share.

The company said the revised outlook assumes a securities impairment of up to $100 million in the second half of 2007.

http://www.reuters.c...20070917?rpc=44

[nicolasillo]

Bank of America Sees `Meaningful Impact' From Turmoil (Update2) By Elizabeth Hester Sept. 17 (Bloomberg) -- Bank of America Corp., the second- biggest U.S. bank, said ``unprecedented dislocations'' in credit markets will have a ``meaningful impact'' on third-quarter results at its corporate and investment bank. Trading and other areas of Bank of America's capital markets and advisory services unit are ``being adversely affected by all of these conditions,'' Chief Financial Officer Joe Price told investors at a conference in San Francisco today. He cited stress on leveraged finance, subprime mortgages and in the commercial paper market as being especially severe. ``These are quite challenging financial times,'' Price, 46, said. ``I cannot remember when credit markets in particular have been as volatile and unpredictable as they have been for the last few months Bank of America joins the growing list of banks and securities firms to warn that the fallout from rising defaults on subprime loans will hurt profit. Merrill Lynch & Co. said last week that ``challenging'' conditions in fixed-income markets required ``fair value adjustments'' to certain investments and financing commitments, and any losses will be reflected in third- quarter earnings. Capital markets and advisory services provided $2.66 billion of Bank of America's $20 billion of revenue in the second quarter, according to data compiled by Bloomberg. Price said that ``in normal times'' the unit generates about a third of profit in the company's corporate and investment bank. ``These are not normal times,'' he said. Flat Profit Analysts currently expect that Bank of America's third- quarter profit will be flat compared with last year and earnings per share from continuing operations will rise 3 percent, according to the average estimates in a Bloomberg survey. Bank of America dropped 44 cents, or less 1 percent, to $49.51 as of 4:16 p.m. in New York Stock Exchange composite trading. The stock was mostly unchanged in after-hours trading. The company said it expects to close on its purchase of ABN Amro Holding NV's LaSalle Bank within in a month, after receiving approval from the Federal Reserve last week. To contact the reporter on this story: Elizabeth Hester in New York at ehester@bloomberg.net Last Updated: September 17, 2007 17:32 EDT

[denleo]

OK, this is pure fundamental analysis. E*Trade lowered its full-year earnings outlook from a range of $1.53 to $1.67 per share to $1.05 to $1.15 per share The stock was at 23 when projections were at about 1.60. Now the projections are 30% lower. The stock is at 13, which is 40% lower. The question is: how is it news? I have never traded a stock and I don't care, but this is a great example of the market looking forward. Denleo And one more thing: Lehman (LEH) has corrected from 80 to 50 (about 35%). So in order for the stock to go much below 50, it has to say that earnings will drop by more than 35% for the year. Denleo

[nimblebear]

OK, this is pure fundamental analysis.

E*Trade lowered its full-year earnings outlook from a range of $1.53 to $1.67 per share to $1.05 to $1.15 per share

The stock was at 23 when projections were at about 1.60. Now the projections are 30% lower. The stock is at 13, which is 40% lower.

The question is: how is it news?

I have never traded a stock and I don't care, but this is a great example of the market looking forward.

Denleo



And one more thing:

Lehman (LEH) has corrected from 80 to 50 (about 35%). So in order for the stock to go much below 50, it has to say that earnings will drop by more than 35% for the year.

Denleo

yes. its interesting how the BKX started falling b4 the [bleeeep] really hit the fan.

[risktaker]

> this is a great example of the market looking forward. > Lehman (LEH) has corrected from 80 to 50 (about 35%). So in order for the stock to go much below 50, it has to say that earnings will drop by more than 35% for the year. Yup, absolutely agree with your analysis.

[greenie]

OK, this is pure fundamental analysis.

E*Trade lowered its full-year earnings outlook from a range of $1.53 to $1.67 per share to $1.05 to $1.15 per share

The stock was at 23 when projections were at about 1.60. Now the projections are 30% lower. The stock is at 13, which is 40% lower.

The question is: how is it news?

I have never traded a stock and I don't care, but this is a great example of the market looking forward.

Denleo



And one more thing:

Lehman (LEH) has corrected from 80 to 50 (about 35%). So in order for the stock to go much below 50, it has to say that earnings will drop by more than 35% for the year.

Denleo

Very good analysis indeed. Most of the bad news have already been priced in. Scorch ahead.

Bears should PANIC !!

[OEXCHAOS]

I'd expect lots of bad news. They'll charge off everything but the CEO's first born in order to make good QoverQ comparisons. I'd not be surprised by things looking WORSE than many expect. Mark

[denleo]

Greenie, why the bad news are priced in. What the hell is wrong with you? I just gave an example of one stock. You go and follow the only one honest hedge fund manager who is short and says that the market will go up. Denleo

[thespookyone]

I'd expect lots of bad news. They'll charge off everything but the CEO's first born in order to make good QoverQ comparisons. I'd not be surprised by things looking WORSE than many expect.

Mark

Mark-It's great to hear you say that, as is my thoughts exactly-and, of course, I respect your opinions. I feel as well, that they will drop as big a bombs as possible in this situation to make next quarter seem extra rosey. Much like estimating earnings ahead low, for future results, the worse the better here.

Spooky

[ogm]

Bears should PANIC !!

btw, greenie, just noticed your new avatar.

I know for the lack of better imagination you decided that it will somehow irritate me... but instead it makes me feel special

Don't feel intimidated, Greenie,

If you'll need help with picking an avatar I can make a few suggestions. Let me know.

Edited by ogm, 17 September 2007 - 09:27 PM.