Charles Schwab Earnings: These Results Have Investors Selling the News

Charles Schwab Corp. (NYSE:SCHW) delivered a profit and met Wall Street’s expectations, AND beat the revenue expectation. The revenue beat is a positive sign to shareholders seeking high growth out of the company. Shares are down 0.65%.

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Charles Schwab Corp. Earnings Cheat Sheet

Results: Net income increased 15.95% to $189 million (15 cents per diluted share) in the quarter versus a net gain of $163 million in the year-earlier quarter.

Revenue: Rose 4.45% to $1.22 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Charles Schwab Corp. reported adjusted net income of 15 cents per share. By that measure, the company met the mean analyst estimate of $0.15. It beat the average revenue estimate of $1.21 billion.

Quoting Management: CEO and President Walt Bettinger commented, “Our ‘through clients’ eyes’ strategy helped build investor trust in Schwab and supported another year of outstanding growth for our company in 2012. Our individual client loyalty scores reached new highs during the year, and our client metrics ended strongly, with December core net new assets totaling a record $22.6 billion, 28% higher than the previous record set in March 2008. Core net new assets totaled $112.4 billion for 2012, up 37% over the prior year. We ended the year with a record $1.95 trillion in total client assets, up 16% over December 2011. We added 900,000 new brokerage accounts to our client base during 2012, and active brokerage accounts reached a record 8.8 million at year-end, up 3% year-over-year. In addition, we served 865,000 banking accounts and 1.6 million corporate retirement plan participants as of month-end December 2012, up 11% and 5%, respectively.”

Key Stats:

Revenue decreased 2.24% from $1.25 billion in the previous quarter. Net income decreased 23.48% from $247 million 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 $0.17 and has not changed. For the current year, the average estimate has moved down from a profit of $0.7 to a profit of $0.69 over the last ninety days.

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(Company fundamentals provided by Xignite Financials.)