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E-Trade Financial loses ground after hours as third quarter results disappoint

The brokerage's earnings in the third quarter dropped to US135mln, or US$0.49 per share
E-Trade Financial loses ground after hours as third quarter results disappoint
E-Trade Financial is an online discount brokerage

E-Trade Financial Corp (NASDAQ:ETFC), the online discount broker, saw shares shed over 3% after hours in New york as it unveiled disappointing third quarter results and plans to buy Trust Company of America (TCA).

The latter is a private firm based in Denver, which holds US$17 billion worth of institutional assets under custody.

E-Trade reportedly said the deal - for US$275mln -  would diversify its revenues.

The brokerage's earnings in the third quarter dropped to US135mln, or US$0.49 per share, which was lower than US$139mln, or $0.51 per share, seen in last year's third quarter.

Analysts had expected the group to earn US$0.51 a share.

Revenue, however, for the three months rose 23.3% to US$599mln - up from US$486 million last year.

The firm reckons the TCA deal will close in the second quarter of 2018 and to generate about US$80 million in additional revenue the following year.

Shares shed  3.25% to stand at US$42.27 after the bell.

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