E*Trade is warning its investors that profits will come in 31% below estimates and that it is exiting the wholesale mortgage business and “streamlining” its direct mortgage operation due to the “disturbance in the credit markets.”
E*Trade is reassuring its customers that it remains healthy despite the restructuring. From E*Trade’s letter to its customers:
Today, we took proactive measures to further insulate E*TRADE from the recent declines in the credit markets. You can feel assured that the measures we’ve taken are non-issues for our customers. Although industry-wide liquidity and credit concerns are making daily headlines, E*TRADE’s business fundamentals are firmly on track, our balance sheet is strong, we have substantial capital and we continue to be profitable – with projected earnings of approximately $500 million in 2007.
There is no word on how many positions might be cut as part of the restructuring.