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RealTime IT News

DLJDirect Previews Results, Changes its Name

The online brokerage service of Donaldson, Lufkin & Jenrette Inc. Thursday said it expects to report revenues of $79 million and a net loss of $4 million or 4 cents per diluted share for the third quarter ended Sept. 30, 2000.

For DLJdirect, that compares to revenues of $55 million and a net loss of $3 million or 3 cents per diluted share for the comparable period last year.

Revenues for the quarter grew 44 percent over the prior comparable period. Total expenses increased by 40 percent as lower marketing costs offset higher operating expenses. Domestic account acquisition costs decreased approximately 40 percent to less than $400 per account for the quarter, compared to approximately $630 per new account, for both the third quarter 1999 and the second quarter 2000.

Actual results for the third quarter will be reported in November, in conjunction with the release of financial results for Donaldson, Lufkin & Jenrette Inc. The reason for the delay, said DLJdirect Chief Executive Officer Blake Darcy, is the merger between Credit Suisse First Boston and DLJ. Darcy said the preliminary earnings announcement was to burst the bubble of suspense over shareholders.

DLJdirect also decided to make a name change to reflect the merger. Following completion of the merger, DLJdirect will christen its domestic brokerage operation as "CSFBdirect."

"The CSFB/DLJ combination results in numerous industry firsts including the number one ranking for the most powerful research team on the street and number one rankings for lead managed equity and IPO offerings, to name a few," said Darcy.

DLJdirect has over one million worldwide customer accounts representing nearly $28 billion in assets. The firm joined larger rivals E*TRADE and top online broker Charles Schwab Corp. in announcing earnings Thursday and fell into some middle ground with its competition.

While E*TRADE surprised Wall Street by notching a profit of $7.2 million profit for the quarter, Schwab's third-quarter net profits fell slightly due to acquisition costs, a slowdown in stock trading, and spending hikes on staff and equipment.