Here's this quarter's summary of the online brokerage results. I don't have results yet for DIR or TWE (they're due in about 3 weeks), but the rest of the numbers are up to date.

Growth:

No surprise, it was yet another dismal quarter for the brokerages (and the market in general). The market environment has badly hurt growth at these companies, and many of them have announced layoffs and other cost-cutting measures. The DIR tracking stock is being re-absorbed into the parent companies (CSFB, which acquired it as part of DLJ). However, there's no indication that any of these companies are in such serious trouble that they might be candidates for bankruptcy.

In spite of everything, the discount brokers continued to attract new accounts, although at a much slower pace than last year. AMTD, the low-commission champ, did particularly well (although they had a hard time by other measures).

Revenue               Q1 2001    Q4 2000    Q3 2000    Q2 2000    Q1 2000    Q4 1999    Q3 1999    Q2 1999    Q1 1999    Q4 1998    Q3 1998    Q2 1998   Q1 1998
AMTD                  $118,987   $130,707   $133,768   $149,086   $170,305   $110,849    $74,478    $78,094    $63,562    $52,117    $39,557         $0        $0
DIR                               $79,991    $79,250    $83,989   $114,213    $76,314    $54,881    $59,674    $47,202    $35,407         $0         $0        $0
ET                    $329,581   $333,766   $340,261   $330,341   $407,430   $246,008   $173,178   $151,742   $126,848   $115,920    $68,662    $62,316   $53,309
SCH                 $1,200,000 $1,335,000 $1,322,500 $1,404,600 $1,571,900 $1,127,400   $883,700   $982,102   $951,485   $788,600         $0         $0        $0
TWE                              $347,300   $359,500   $345,600   $488,700   $381,600   $253,100   $243,000         $0   $215,000   $169,600         $0        $0
 
Revenue Growth (Seq)  Q1 2001    Q4 2000    Q3 2000    Q2 2000    Q1 2000    Q4 1999    Q3 1999    Q2 1999    Q1 1999    Q4 1998    Q3 1998    Q2 1998   Q1 1998
AMTD                        -9%        -2%       -10%       -12%        54%        49%        -5%        23%        22%        32%
DIR                                     1%        -6%       -26%        50%        39%        -8%        26%        33%
ET                          -1%        -2%         3%       -19%        66%        42%        14%        20%         9%        69%        10%        17%
SCH                        -10%         1%        -6%       -11%        39%        28%       -10%         3%        21%
TWE                                    -3%         4%       -29%        28%        51%         4%
 
Accounts (End of Qtr  Q1 2001    Q4 2000    Q3 2000    Q2 2000    Q1 2000    Q4 1999    Q3 1999    Q2 1999    Q1 1999    Q4 1998    Q3 1998    Q2 1998   Q1 1998
AMTD                      1478       1356       1233       1165        992        686        560        505        428        354        306          0         0
DIR                                   520        494        468        429        347        307        277        243        210        190          0         0
ET                        3725       3559       3315       2945       2614       1881       1551       1241        909        676        544        459       403
SCH                       7600       7500       7400       7200       6900       6600       6316       6166       5900       5600       5500       5300      5000
TWE                                  3241       3109       2979       2732       2356       2168       2066
 
Account Growth (Seq)  Q1 2001    Q4 2000    Q3 2000    Q2 2000    Q1 2000    Q4 1999    Q3 1999    Q2 1999    Q1 1999    Q4 1998    Q3 1998    Q2 1998   Q1 1998
AMTD                       9.0%      10.0%       5.8%      17.4%      44.6%      22.5%      10.9%      18.0%      20.9%      15.7%
DIR                                   5.3%       5.6%       9.1%      23.6%      13.0%      10.8%      14.0%      15.7%      10.5%
ET                         4.7%       7.4%      12.6%      12.7%      30.0%      21.3%      25.0%      36.5%      34.5%      24.3%      18.5%      13.9%
SCH                        1.3%       1.4%       2.8%       4.3%       4.5%       4.5%       2.4%       4.5%       5.4%       1.8%       3.8%       6.0%
TWE                                   4.2%       4.4%       9.0%      16.0%       8.7%       4.9%
 
Assets (End of Qtr)   Q1 2001    Q4 2000    Q3 2000    Q2 2000    Q1 2000    Q4 1999    Q3 1999    Q2 1999    Q1 1999    Q4 1998    Q3 1998    Q2 1998   Q1 1998
AMTD                   $23,500    $27,900    $36,000    $34,800    $38,900    $31,600    $22,900    $22,600    $19,500    $14,900    $11,400         $0
DIR                               $22,800    $27,600    $27,500    $29,400    $20,300    $14,200    $13,300    $11,200     $8,900         $0         $0
ET                     $47,900    $52,600    $65,900    $60,700    $65,200    $44,100    $28,400    $26,000    $21,000    $15,200    $11,200    $11,200
SCH                   $805,800   $871,700   $961,000   $931,000   $823,000   $725,000   $595,000   $591,700   $542,000   $491,100   $408,200         $0
TWE                              $154,100   $158,900   $165,300   $175,000   $150,200   $121,700   $112,700         $0    $95,700         $0         $0
 
Asset Growth (Seq)    Q1 2001    Q4 2000    Q3 2000    Q2 2000    Q1 2000    Q4 1999    Q3 1999    Q2 1999    Q1 1999    Q4 1998    Q3 1998    Q2 1998   Q1 1998
AMTD                     -15.8%     -22.5%       3.4%     -10.5%      23.1%      38.0%       1.3%      15.9%      30.9%      30.7%
DIR                                 -17.4%       0.4%      -6.5%      44.8%      43.0%       6.8%      18.8%      25.8%
ET                        -8.9%     -20.2%       8.6%      -6.9%      47.8%      55.3%       9.2%      23.8%      38.2%      35.7%       0.0%
SCH                       -7.6%      -9.3%       3.2%      13.1%      13.5%      21.8%       0.6%       9.2%      10.4%      20.3%
TWE                                  -3.0%      -3.9%      -5.5%      16.5%      23.4%       8.0%
 

Operating Efficiency:

Operating margins suffered a little bit, but generally held up pretty well (AMTD's operating margin would have been in the 23% range, if not for the ongoing drain of their OnMoney subsdiary).

Advertising spending remained heavy this quarter, although it is expected to decrease sharply in future quarters. Cost per net new account was generally higher, reflecting the difficulty of attracting new customers in the midst of a bear market (SCH's spending is probably overstated, because their account totals are rounded to the nearest 100K; the real figure is probably in the $600-$700 range).

Operating Income      Q1 2001    Q4 2000    Q3 2000    Q2 2000    Q1 2000    Q4 1999    Q3 1999    Q2 1999    Q1 1999    Q4 1998    Q3 1998    Q2 1998   Q1 1998
AMTD                    $7,891   ($23,032)      $286     $4,598     $3,201   ($21,711)   ($9,197)    $8,918     $7,979     $3,742     $5,791         $0        $0
DIR                               ($9,358)   ($1,832)   ($4,564)   $14,819      ($820)   ($2,238)    $6,032     $7,173     $1,785         $0         $0        $0
ET                     $16,168     $5,004     $7,246    ($7,671)  ($13,715)  ($58,200)  ($32,653)  ($27,668)  ($26,489)  ($11,550)  ($15,747)    $6,560    $6,118
SCH                    $97,000   $138,700   $142,300   $137,100   $296,900   $170,500   $124,500   $150,991   $142,767   $106,400         $0         $0        $0
TWE                               $37,100    $42,200    $34,500    $76,600    $57,000    $20,900    $26,400         $0    $20,100    $14,500         $0        $0
 
Net (pre-tax, pre-ad  Q1 2001    Q4 2000    Q3 2000    Q2 2000    Q1 2000    Q4 1999    Q3 1999    Q2 1999    Q1 1999    Q4 1998    Q3 1998    Q2 1998   Q1 1998
AMTD                   $16,868    $20,315    $33,904    $48,815    $60,326    $24,967    $10,512    $25,995    $25,684    $15,535    $12,941         $0        $0
DIR                               ($2,125)    $6,021    $12,073    $43,539    $24,718    $14,400    $24,473    $17,362     $8,244         $0         $0        $0
ET                     $96,624   $104,849   $101,019   $115,298   $154,846    $59,264    $27,896    $39,670    $36,926    $34,236    $10,294    $21,789    $6,118
SCH                   $258,000   $314,800   $303,000   $330,600   $511,800   $358,800   $261,500   $304,062   $288,583   $229,100         $0         $0        $0
TWE                               $92,900    $98,100    $90,200   $166,500   $137,400    $64,600    $63,600         $0    $49,600    $39,100         $0        $0
 
Operating Margin      Q1 2001    Q4 2000    Q3 2000    Q2 2000    Q1 2000    Q4 1999    Q3 1999    Q2 1999    Q1 1999    Q4 1998    Q3 1998    Q2 1998   Q1 1998
AMTD                      14.2%      15.5%      25.3%      32.7%      35.4%      22.5%      14.1%      33.3%      40.4%      29.8%      32.7%       ERR       ERR
DIR                                  -2.7%       7.6%      14.4%      38.1%      32.4%      26.2%      41.0%      36.8%      23.3%       ERR        ERR       ERR
ET                        29.3%      31.4%      29.7%      34.9%      38.0%      24.1%      16.1%      26.1%      29.1%      29.5%      15.0%      35.0%     11.5%
SCH                       21.5%      23.6%      22.9%      23.5%      32.6%      31.8%      29.6%      31.0%      30.3%      29.1%       ERR        ERR       ERR
TWE                                  26.7%      27.3%      26.1%      34.1%      36.0%      25.5%      26.2%       ERR       23.1%      23.1%       ERR       ERR
 
Ad Spending           Q1 2001    Q4 2000    Q3 2000    Q2 2000    Q1 2000    Q4 1999    Q3 1999    Q2 1999    Q1 1999    Q4 1998    Q3 1998    Q2 1998   Q1 1998
AMTD                   $45,606    $57,477    $33,619    $41,222    $54,774    $58,662    $24,815    $12,105    $13,154     $9,643     $3,857         $0        $0
DIR                               $13,075     $9,125    $19,990    $18,070    $25,452    $18,128    $13,232     $6,101     $5,228         $0         $0        $0
ET                     $93,698    $97,940    $91,773   $115,081   $177,484   $119,492    $77,443    $82,369    $60,006    $55,001    $37,171    $11,588        $0
SCH                    $94,000    $88,900    $62,600    $77,100   $103,700    $77,100    $57,700    $54,483    $52,591    $53,300         $0         $0        $0
TWE                               $28,000    $21,900    $23,400    $29,200    $36,100    $24,100    $14,600         $0    $11,500     $9,000         $0        $0
 
Ad Cost/ New Account  Q1 2001    Q4 2000    Q3 2000    Q2 2000    Q1 2000    Q4 1999    Q3 1999    Q2 1999    Q1 1999    Q4 1998    Q3 1998    Q2 1998   Q1 1998
AMTD                   $373.82    $467.29    $494.40    $238.28    $179.00    $465.57    $451.18    $157.21    $177.76    $200.90
DIR                               $502.88    $350.96    $512.56    $220.37    $636.30    $604.27    $389.18    $184.88    $261.40
ET                     $564.45    $401.39    $248.04    $347.68    $294.33    $362.10    $249.82    $248.10    $257.54    $416.67
SCH                    $940.00    $889.00    $313.00    $257.00    $345.67    $271.48    $384.67    $204.82    $175.30    $533.00
TWE                               $212.12    $168.46     $94.74     $77.66    $192.02    $236.27
 

Summary:

Things are bad, but this is still a viable business model.

At current prices, growth by acquisition is starting to look practical (cost per account is < $1000, in several cases), although that doesn't include extra merger costs (goodwill, system integration expenses, loss of disgruntled customers, etc.). Whether the oft-mentioned "consolidation" will actually happen remains to be seen. Several analysts are predicting it, but some prominent industry executives are on record against it.

-- stward