Charles Schwab Q4 Profit Up 11%, Results Beat View

(RTTNews) - Brokerage and investment manager Charles Schwab Corp. (SCHW) on Friday reported an 11 percent increase in profit for the fourth 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 success with clients and ongoing expense discipline in 2014 led to some of the strongest annual financial results in company history despite the extraordinarily low interest rate environment. While net interest revenue remained severely constrained, our growth and diversified sources enabled us to achieve record net revenues.."

The San Francisco, California-based company's net income available to common shareholders for the fourth quarter was $329 million or $0.25 per share, up from $297 million or $0.23 per share in the prior-year quarter.

The latest quarter's results include two nonrecurring items - net litigation proceeds of about $28 million and net losses of $8 million from selling securities totaling approximately $500 million, both relating to the non-agency residential mortgage-backed securities portfolio.

Taken together, these two items reduced pre-tax income by about $20 million, or $0.01 per share.

On average, 20 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 8 percent to $1.55 billion from $1.44 billion in the same quarter last year, and beat analysts' consensus estimate of $1.53 billion.

Asset management and administration fees grew 5 percent to $641 million, while net interest revenue increased 10 percent to $584 million. Trading revenue rose 3 percent from last year to $239 million.

Client assets increased 10 percent from last year to reach $2.46 trillion.

Clients' daily average revenue trades increased 6 percent from last year, while average revenue per revenue trade declined 2 percent. New brokerage accounts at the end of the quarter declined 3 percent from last year to 243,000.

As at the end of the fourth quarter, the company served 9.39 million active brokerage accounts and 985,000 banking accounts, up 3 percent and 8 percent, respectively, from the year-ago quarter.

For fiscal 2014, Charles Schwab's net income available to common stockholders rose to $1.26 billion or $0.95 per share from $1.01 billion or $0.78 per share last year. Net revenues grew 11 percent to $6.06 billion from $5.44 billion in the prior year.

Street expected the company to earn $0.95 per share for the year on revenues of $6.03 billion.

SCHW is trading at $26.71, up $0.04 or 0.15 percent on a volume of 279,905 shares.