Charles Schwab Earnings: Everything You Must Know Now

Charles Schwab Corp. (NYSE:SCHW) delivered a profit and missed Wall Street’s expectations, BUT beat the revenue expectation. The revenue beat is a positive sign to shareholders seeking high growth out of the company. Shares are down 0%.

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Charles Schwab Corp. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share decreased 0% to $0.15 in the quarter versus EPS of $0.15 in the year-earlier quarter.

Revenue: Rose 3.61% to $1.29 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Charles Schwab Corp. reported adjusted EPS income of $0.15 per share. By that measure, the company missed the mean analyst estimate of $0.16. It beat the average revenue estimate of $1.27 billion.

Quoting Management: CFO Joe Martinetto noted, “Our earnings picture for 2013 hasn’t changed – the temporary and seasonal factors elevating our first quarter compensation and benefits expense will fade and we are taking action to address the evolving revenue outlook for the year. Right now, that outlook includes balance and spread-related revenues that are mostly in line with our expectations and trading activity that remains more muted than planned.”

Mr. Martinetto continued, “As previously disclosed, our first quarter expenses included a total of approximately $30 million pre-tax relating to overlapping field incentive payout schedules; increased and accelerated health savings account contributions; and revised equity incentive award vesting for retirement-eligible employees. With these impacts largely behind us, as well as certain payroll taxes reaching their caps and a heightened focus on staffing levels, we expect comp and benefits will decline by approximately $50 million sequentially in the second quarter, and show only limited growth in the second half of the year. In addition to careful headcount management, we are also adjusting our planned spending for projects and marketing so that targeted expense growth slows but continues to allow for both increased investment in our clients and improvement in profit-margin and earnings for 2013.”

Mr. Martinetto concluded, “Overall, we believe our diversified revenue streams and ongoing expense discipline will help us achieve at least a 30% pre-tax profit margin and earnings per share in the mid-$0.70’s for full-year 2013, consistent with the baseline scenario we described during our Winter Business Update on February 7. With solid profitability and a healthy balance sheet that includes nearly $10 billion of stockholders’ equity, we remain well positioned to support our growing businesses.”

Key Stats (on next page)…

Revenue increased 2.79% from $1.26 billion in the previous quarter. EPS decreased 0% from $0.15 in the previous quarter.

Looking Forward: Analysts have a neutral outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings is a profit of $0.18 and has not changed. For the current year, the average estimate has moved up from a profit of $0.73 to a profit of $0.74 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at]