Charles Schwab Meets Lowered Earnings Forecast
Chris Frankie
04/17/01 - 03:09 PM EDT
Charles Schwab (SCH Quote) met Wall Street's lowered earnings expectations for the first quarter, but the bottom line was hurt as investors were scared off by the stormy economic climate.
The firm said on Tuesday that it earned $120 million, or 8 cents a share, in the first quarter, before charges, meeting the consensus estimate compiled by
Thomson Financial/First Call. The company earned $232 million, or 23 cents a share, in the year-ago period. Revenue slumped to $1.2 billion from $1.7 billion in the first quarter last year.
While Schwab met the current consensus estimate, that number was revised downward a number of times. The San Francisco-based firm said in March that it expected to post earnings of 8 cents a share, after warning in February that net income could be below 15 cents a share.
Shares of Schwab gained 18 cents, or 1%, to $18.18 in recent
New York Stock Exchange trading.
"We believe that the current market environment has led to fundamental changes in investor behavior that may persist for some time," the company said in a statement. "While the hiring restrictions and other expense reduction measures we've put in place since last November enabled the company to achieve a 10% after-tax operating profit margin for the first quarter, this perspective has led us to an even greater focus on expenses, including our recently announced plans to restructure our workforce, facilities and systems capacity.''
