Loss at E*Trade Is Bigger Than Expected

The E*Trade Financial Corporation, an online broker, reported a bigger-than-expected second-quarter loss Tuesday and warned that credit-related troubles could result in more losses.

E*Trade posted a net loss of $94.6 million, or 19 cents a share, in contrast to a profit of $159.1 million, or 37 cents a share, a year earlier. Revenue was down 20 percent, to $532.3 million.

E*Trade said it liquidated about 65 percent of $330 million in preferred equity held in the mortgage lenders Fannie Mae and Freddie Mac, a move that will result in an $83 million pretax loss in the third quarter.

It also warned that “the current economic environment may impede our expectations to return to profitability from continuing operations this year.”

The loss from continuing operations was $119.4 million in the quarter, in contrast to a profit of $157.7 million in the comparable quarter of 2007.

E*Trade’s total loan delinquencies grew 9 percent from 2007, while its home equity loan delinquencies grew 4 percent.