Charles Schwab (SCHW) reported third quarter earnings that narrowly beat analysts estimates. The online broker earned $376 million, or 28 cents per share in the third quarter. Excluding non-recurring items, such as a $14 million tax benefit, adjusted EPS would be 27 cents per share. In the same quarter a year ago, Schwab earned 24 cents per share.
Schwab revenues came in at $1.597 billion in the quarter, which was a three percent increase from last year, and was in line with analysts estimates. Net interest income rose 11 percent in the quarter thanks to a bit of a rise in short-term interest rates. Likely the most impressive number from the earnings report was that Schwab’s pretax profit margin soared to 36.5 percent in the quarter. That’s the highest pretax profit margin for the company since 2008.
What about the all important Daily Average Revenue Trades (DARTs) figure? They came in at 304,000 in the quarter, which was a nice 13 percent gain from a year ago. Looking inside that number, Schwab said clients made 514,260 daily trades during the week of August 24, but only 294,888 on the week of September 28. The stock market volatility of late August certainly helped here. Trading revenue grew by nine percent to $228 million on slightly lower commission prices.
Total client assets of $2.4 trillion were up one percent from a year ago. Shares of SCHW moved up nicely in response to this report.
Click here for the full earnings report.