E-Trade’s Trading Volume Dips in July

Online bank and discount brokerage E-Trade Group Inc. on Wednesday said customers traded less in July than in June even as the stock market continued to make headway.

E-Trade’s Chief Operating Officer Jarrett Lilien said the firm was pleased with its July results, though “it wouldn’t surprise me” if August volume falls further in a traditional Wall Street summer slowdown.

Lilien also said E-Trade was “comfortable” with its 2003 profit forecast of 52 cents to 57 cents a share, which it raised last month. The average of three analysts polled by Reuters Research calls for 55 cents.

E-Trade, based in Menlo Park, Calif., said daily average revenue trades fell 2% in July to 135,057 from 137,871 in June, but were up 16% from the daily average of 116,663 in the second quarter.

The Standard & Poor’s 500 index rose 1.6% in July and the Nasdaq composite index 6.9%, although much of the gains came early in the month.

Active brokerage accounts rose less than 6,000 from June to 2.9 million and are down 21% from 3.7 million in the second quarter of 2002. The company added 53,827 accounts in July, down 60% from 134,985 in June.

July was the first month for which E-Trade announced monthly trading activity. Rival Ameritrade Holding Corp. last week said average July daily trading volume rose 4% from the second quarter, to 161,000 trades. Charles Schwab Corp. has not reported July volume.

Lilien said E-Trade is “ahead of schedule” on its restructuring plan. Chief Executive Mitchell Caplan, who took over in January, is shutting brokerage offices and eliminating money-losing products in a bid to save up to $50 million a year.

E-Trade took $76 million of restructuring and other charges last quarter, and expects $45 million of charges this quarter.

E-Trade shares fell 29 cents to $8.75 on the New York Stock Exchange. The shares have more than doubled since March 12, when the S&P; and Nasdaq hit their 2003 intraday lows.