Strong second-quarter results
Charles Schwab (SCHW) reported its second-quarter results on July 17. The brokerage giant posted an EPS of $0.60, which exceeded analysts’ estimates by $0.02. In the second quarter, the company saw 384,000 new brokerage accounts, which reflects a rise of 8% YoY (year-over-year) and a decline of 13% sequentially. The primary cause of the sequential decline could be market participants’ interest towards equities mainly due to rising trade war tension between the US and China.
At the time of this writing, Charles Schwab has risen 4.15% and is trading at $53.18. The primary reason for the upward movement is the company’s strong earnings report. In the second quarter, the company saw core net new assets of $53.4 billion. Other brokerages (VFH) including E*TRADE Financial (ETFC) and TD Ameritrade Holding (AMTD) are scheduled to report their earnings on July 19 and July 23. Interactive Brokers Group (IBKR) is scheduled to report its earnings after the markets close today.
Charles Schwab’s revenues
Charles Schwab garnered revenues of $2.49 billion in the second quarter, which exceeded analysts’ expectations by $20 million. The company’s revenues represent a rise of 17% YoY and 4% sequentially, respectively. During the same period, the company generated net interest revenues of $1.40 billion, which implies a rise of 34% YoY.
In the second quarter, Charles Schwab generated trading revenues of $180 million, which implies 15% growth YoY. However, the revenues fell 10% sequentially mainly due to lower trading volumes from lower market movements. The company ended the second quarter with total client assets of $3.4 trillion.