E*Trade volume beats expectations, Schwab's down

NEW YORK (Reuters) - Shares of online broker E*Trade Financial Corp (ETFC.O: Quote, Profile, Research, Stock Buzz) surged on Wednesday after the company delivered higher April trading volume than analysts had expected.

E*Trade reported lower but better-than-expected numbers, sending its shares up over 5.5 percent. Meanwhile, Charles Schwab Corp (SCHW.O: Quote, Profile, Research, Stock Buzz), the largest online broker, also reported lower figures, but in line with analyst estimates.

In a monthly report, E*Trade said daily average trading volume fell 1.6 percent in April from March to 180,970 trades, while Schwab saw average trading volume drop 8 percent to 295,500 per day.

Analyst Richard Repetto of Sandler O'Neill and Partners said E*Trade's trading volume declined less than the industry average, which fell 2.4 percent.

E*Trade also brought in more new trading accounts than analysts had expected, Repetto said. While new accounts fell by 6,000 in April, that included a loss of 24,000 accounts from the sale of retirement planner Retirement Advisors of America.

"Excluding the sale of a business, they brought in roughly 18,000 new accounts -- well above the 6,000 or so they brought in last month." Repetto said.

E*Trade finalized the sale of Retirement Advisors of America to PHH Investments Ltd on April 11th. According to the company, the sale resulted in the departure of $2.3 billion in customer assets.

The company has taken steps to sell off non-core assets to focus on its online brokerage business and to help strengthen a balance sheet damaged by the subprime mortgage crisis. E*Trade reported losses for the past two quarters.

Meanwhile, Schwab's April results were in line with analyst estimates. Schwab's daily average revenue trading (DART) numbers fell 7 percent to 250,600, near the high end of the 2.5 to 7.5 percent range predicted by Sandler O'Neill.  Continued...