Charles Schwab Q2 Profit Up 9%, Results Beat View

(RTTNews) - Brokerage and investment manager Charles Schwab Corp. (SCHW) on Thursday reported a 9 percent increase in profit for the second quarter from last year, reflecting higher revenues and growth in brokerage accounts as well as client assets. Both revenue and earnings per share for the quarter beat analysts' expectations.

Walt Bettinger, CEO of Charles Schwab said, "Our contemporary full-service investing model continues to appeal to clients and prospects, and helped us achieve strong quarterly operating results in the face of sideways equity markets and continuing low interest rates. We gathered $37.0 billion of core net new assets, the highest second quarter in our history, and maintained a 6% annualized organic growth rate despite seasonal tax outflows in April."

The San Francisco, California-based company's net income available to common shareholders for the second quarter was $330 million or $0.25 per share, up from $302 million or $0.23 per share in the prior-year quarter.

The latest quarter's results litigation proceeds of about $17 million relating to the company's non-agency residential mortgage-backed securities portfolio that increased earnings per share by $0.01.

On average, 21 analysts polled by Thomson Reuters expected the company to report earnings of $0.24 per share for the quarter. Analysts' estimates typically exclude special items.

Net revenues for the quarter grew 6 percent to $1.57 billion from $1.48 billion in the same quarter last year and beat analysts' consensus estimate of $1.54 billion.

Asset management and administration fees grew 6 percent to $670 million, while net interest revenue increased 9 percent to $612 million. Trading revenue declined 4 percent from last year to $203 million.

Client assets increased 6 percent from last year to reach $2.54 trillion.

Clients' daily average revenue trades decreased 3 percent from last year, while average revenue per revenue trade declined 2 percent. New brokerage accounts at the end of the quarter rose 16 percent from last year to 280,000.

As at the end of the second quarter, the company served 9.61 million active brokerage accounts and 1.0 million banking accounts, up 4 percent and 6 percent, respectively, from the year-ago quarter.

SCHW is trading at $34.07, up $0.42 or 1.25 percent on a volume of 2.21 million shares.