Charles Schwab (SCHW) reported second quarter earnings that were up 28 percent from a year ago. Revenues were up 17 percent from last year. The online broker brought in 30 cents per share in the quarter which matched analysts expectations. Revenues were $1.83 billion versus expectations of $1.80 billion.
Schwab did miss estimates on trading revenue. Analysts expected $203.2 million, but the broker reported $201 million. A closer look at the revenue beat at Schwab shows that the primary reason for the beat was lower money fund waivers. Asset and administration fees were up 13 percent as higher short-term interest rates helped the company.
Daily Average Revenue Trades (DARTs) were 279,000 for Schwab in the quarter. That is down substantially from the 328,000 reported in the first quarter, but up slightly from last year’s 267,000 number.
Another impressive number from the report was Schwab’s pre-tax profit margin. The margin of 39.4 percent was the highest since 2008 for Schwab. Walt Bettinger, CEO of Charles Schwab, commented on this impressive margin by saying, “During the intervening seven-plus years, we have focused on balancing near-term profitability with reinvestment to drive growth, while working through the economic and interest rate aftermath of the financial crisis.” Bettinger added that this was Schwab’s 13th straight quarter of pre-tax profit margins above 30 percent.
Core net new assets increased by $26.6 billion. The number of brokerage accounts increased by 271,000 in the quarter. Schwab now has 10.0 million brokerage accounts.
For the full press release from Schwab on their second quarter earnings click here.
A one year stock chart of SCHW is included below.