Stock Watch: DLJdirect Gains on Forecast

DLJdirect (NYSE: DIR) rose 13/16 to 5 3/16 Thursday after the online brokerage said it expects to beat analysts’ expectations when it reports third-quarter earnings next month.

The Jersey City, New Jersey-based affiliate of securities firm Donaldson, Lufkin & Jenrette, Inc. (NYSE: DLJ) said it expects a net loss of $4 million, or 4 cents per fully diluted share, on revenue of $79 million. That projection compares with a loss of $3 million, or 3 cents per share, on revenue of $55 million in the same period last year. Analysts were looking for the company to lose 5 cents per share.

DLJ and DLJdirect are being acquired by Credit Suisse First Boston. The online firm said its domestic brokerage operation will be renamed 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,” said chief executive officer Blake Darcy.

DLJdirect has more than one million customer accounts worldwide, representing almost $28 billion in assets.

DLJdirect’s news followed a stronger-than-expected earnings report from another online broker, E*Trade Group, Inc. (Nasdaq: EGRP), which Thursday said third-quarter earnings totaled 2 cents per share, against analysts’ forecast for a breakeven quarter.

Not all online brokers did well in the quarter. Knight Trading Group, Inc. (Nasdaq: NITE) earlier this week said tough market conditions and costs associated with international expansion resulted in a 27 percent decline in pro forma net income for the third quarter.

Jupiter Media Metrix recently found that traffic to online trading sites dropped by nearly 20 percent during the second quarter, even as overall traffic to business and finance sites rose. Online brokers without brick-and-mortar affiliates, Jupiter found, lost 30 percent of their traffic between March and July. Those firms with a physical presence as well, however, lost only 18 percent.

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