The Charles Schwab Corp Earnings: A Streak of Profit Growth Continues

S&P 500 (NYSE:SPY) component The Charles Schwab Corporation (NYSE:SCHW) reported its results for the fourth quarter. Charles Schwab 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 Fourth Quarter.

Results: Net income for The Charles Schwab Corporation rose to $163 million (13 cents per share) vs. $119 million (10 cents per share) in the same quarter a year earlier. This marks a rise of 37% from the year earlier quarter.

Revenue: Revenue was $1.11 billion last quarter.

Actual vs. Wall St. Expectations: SCHW fell in line with the mean analyst estimate of 13 cents per share. Analysts were expecting revenue of $1.11 billion.

Quoting Management: President and CEO Walt Bettinger said, “Throughout 2011, we continued to successfully grow our business, deliver strong near-term profitability and build the company’s earnings power in the midst of a sustained tough operating environment. We ended 2011 with solid client metrics — net new assets totaled $10.5 billion in December, the highest of the year excluding significant one-time flows, and core net new assets totaled an industry-leading $82.3 billion for the year, up from $78.1 billion in 2010. Client assets totaled $1.68 trillion as of month-end December 2011, up 7% year-over-year. Additionally, we added over 1.1 million new brokerage accounts to our client base during 2011 and ended the year serving 8.6 million active brokerage accounts, 780,000 banking accounts and 1.49 million corporate retirement plan participants, which were up 7%, 13% and 1%, respectively.”

Key Stats:

The company has now seen net income rise in four straight quarters. In the third quarter, net income rose 77.4% while the figure climbed 16.1% in the second quarter and 3950% in the first quarter from the year earlier.

The company fell in line with estimates last quarter after missing forecasts in the previous quarter with net income of 18 cents versus a mean estimate of net income of 19 cents per share.

Looking Forward: Over the past ninety days, the average estimate for the first quarter of the next fiscal year has fallen from 18 cents per share to 16 cents, indicating that analysts are growing pessisimistic about the company’s performance next quarter. At 71 cents per share, the average estimate for the fiscal year has fallen from 75 cents ninety days ago.

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), Penson Worldwide, Inc. (NASDAQ:PNSN), and Raymond James Financial, Inc. (NYSE:RJF).

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

 

To contact the reporter on this story: Derek Hoffman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com