Charles Schwab Earnings Cheat Sheet: Profit Rises for Second Straight Quarter

S&P 500 (NYSE:SPY) component The Charles Schwab Corporation (NYSE:SCHW) reported its results for the second quarter. Charles Schwab Corp. is a savings and loan holding company. Through its subsidiaries, the company provides individuals and institutional clients with securities brokerage, banking and related financial services.

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The Charles Schwab Earnings Cheat Sheet for the Second Quarter

Results: Net income for the investment brokerage rose to $238 million (20 cents per share) vs. $205 million (17 cents per share) in the same quarter a year earlier. This marks a rise of 16.1% from the year earlier quarter.

Revenue: Net revenue was $1.19 billion last quarter.

Actual vs. Wall St. Expectations: SCHW fell in line with the mean analyst estimate of 20 cents per share. Analysts were expecting revenue of $1.2 billion.

Quoting Management: CEO Walt Bettinger commented, “Our valued clients are showing a resiliency in this environment that bodes well for the future. Although the economic recovery is progressing slower than hoped, clients remain solidly engaged with their investments, as cash holdings at Schwab have declined to pre-crisis levels. While trading activity is relatively soft, our diverse suite of investment products and services is propelling our ongoing growth, as clients increasingly opt to enroll in our advisory solutions. Client assets enrolled in Schwab retail advisory offerings increased to $113billion at month-end June, up 20% year-over-year. Adding in assets under the guidance of an independent fee-based advisor brings total advised assets at quarter-end to $811billion, up 17%. Overall, we ended June serving 8.1million active brokerage accounts, 745,000 banking accounts and 1.44million retirement plan participants. Despite a challenging environment, net new assets totaled $15.4billion for the second quarter, up 10% from the second quarter of 2010 after adjusting for a large clearing outflow last year, and total client assets reached $1.66trillion at quarter-end, up 22% from a year ago.”

Key Stats:

The company fell in line with estimates last quarter after beating forecasts in the previous quarter with net income of 20 cents versus a mean estimate of net income of 19 cents per share.

Competitors to Watch: optionsXpress Hldgs., Inc. (NASDAQ:OXPS), TD Ameritrade Holding Corp. (NASDAQ:AMTD), E TRADE Financial Corp. (NASDAQ:ETFC), Interactive Brokers Group, Inc. (NASDAQ:IBKR), LPL Investment Hldgs. Inc. (NASDAQ:LPLA), TradeStation Group, Inc. (NASDAQ:TRAD), Investment Tech. Group (NYSE:ITG), Bank of America Corp. (NYSE:BAC), Citigroup (NYSE:C), JPMorgan (NYSE:JPM), Wells Fargo (NYSE:WFC), Penson Worldwide, Inc. (NASDAQ:PNSN), and Raymond James Financial, Inc. (NYSE:RJF).

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(Source: Xignite Financials)

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