The Charles Schwab's 2Q Results: Postgame Scorecard
The Charles Schwab's (NYSE:SCHW) profit climbed in the second quarter, topping analysts' expectations.
Earnings and Revenue The company experienced stronger-than-expected EPS and revenues. The company reported EPS of 20 cents a share versus the 18 cents a share estimate and revenues of $1.28 billion versus the $1.23 billion estimate. The estimates of 16 analysts ranged from profit of 16 cents to profit of 20 cents.
The company's net income for the quarter was $261 million. This is 9.7% higher than the year-ago quarter. Revenue climbed 7.6% from $1.24 billion in the same period last year.
Company Fundamental Trends Last quarter's rising profit follows a drop of 19.8% to $163 million in the previous quarter.
History Against Expectations The company topped estimates last quarter after falling in line with expectations in the first quarter. It reported net income of 15 cents per share.
Official Comment: CEO and President Walt Bettinger commented, "Our 'through clients' eyes' strategy continues to prove itself and deliver growth as it resonates with investors in all economic environments. While the economy and financial markets faced heightened challenges during the second quarter, demand for our full-service capabilities remained strong - we ended the quarter with 2.5 million accounts at Schwab that were either enrolled in one of our advisory offerings or under the guidance of an independent advisor, up 9% year-over-year. Even as trading activity weakened during the period, we saw other signs of sustained client engagement, including $16.0 billion in net new assets, up 4% from a year ago; an ongoing pattern of net purchases of securities throughout the quarter; and cash holdings at Schwab that remained at pre-financial crisis levels. In addition, clients opened 221,000 new brokerage accounts during the second quarter, up 8% year-over-year. We ended the quarter with 8.7 million active brokerage accounts, 822,000 banking accounts, and $1.80 trillion in total client assets, up seven, 10, and 9%, respectively, over June 2011." Mr. Bettinger added, "We're proud that a growing number of clients trust us to help them reach their financial goals, and we believe our commitment to sustained investment in our client base is essential to reinforcing that trust and supporting our long-term expansion. That investment is always balanced with our emphasis on strong near-term profitability.
Estimates provided by Zacks Investment Research and company fundamentals from Xignite Financials.