Not every brokerage house is making money hand over fist.
Charles Schwab (SCHW) posted slightly better-than-expected second-quarter earnings and revenue early Tuesday, ending the quarter with a record $9.4 trillion in client assets. Despite this, SCHW shares dropped early in trading, while Bank of America (BAC) saw gains.
Charles Schwab reported Q2 revenue of $4.69 billion, marking a less than 1% increase, and earnings of 73 cents per share, down about 3% from the same period last year. Analysts had predicted earnings of 72 cents per share and revenue of $4.68 billion, according to FactSet.
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Despite these positive results, Charles Schwab’s stock fell 7.2% to 69.63 in Tuesday’s market action. On Monday, SCHW shares had already dipped 0.4% to 75.07, and they remain below the 79.49 buy point identified by MarketSurge from a cup base formation.
The firm reported a record $9.4 trillion in client assets by the end of the quarter. The number of active brokerage accounts increased by just under 1%, while the number of bank accounts rose by 2% compared to the previous quarter.
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However, net revenue from interest totaled $2.16 billion, a 6% drop from the same quarter last year and slightly below analysts’ expectations of $2.17 billion. This decline in interest revenue aligns with broader industry trends, as Wells Fargo (WFC) reported a 9% decrease in net interest income last week, which was worse than the anticipated 7.9% decline.
Key Points:
- Charles Schwab reported Q2 earnings of 73 cents per share and revenue of $4.69 billion, slightly surpassing expectations.
- The firm’s client assets reached a record $9.4 trillion, with a slight increase in active brokerage accounts and a 2% rise in bank accounts.
- Despite positive earnings, SCHW shares fell 7.2% on Tuesday, with the stock currently below the identified buy point.
- Net revenue from interest decreased by 6% to $2.16 billion, just below analyst expectations.
- The decline in interest revenue is consistent with broader industry trends, as seen with Wells Fargo’s reported 9% drop in net interest income.
TL Holcomb – Reprinted with permission of Whatfinger News
