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Schwab Reports Second Quarter Results

Stocks in this article: SCHW

The Charles Schwab Corporation announced today that its net income for the second quarter of 2013 was $256 million, up 24% from $206 million for the first quarter of 2013, and down 7% from $275 million for the second quarter of 2012. Net income for the six months ended June 30, 2013 was $462 million, down 2% from the year-earlier period. The company’s financial results for both the second quarter and first half of 2012 include a pre-tax gain of $70 million, or $44 million after-tax, relating to the resolution of a vendor dispute. Excluding the gain, net income rose by 11% year-over-year for the second quarter of 2013, and 8% for the first half of the year (1).

  Three Months Ended--June 30,--   %   Six Months Ended--June 30,--   %
Financial Highlights   2013     2012     Change   2013     2012     Change
Net revenues (in millions) $ 1,337 $ 1,283 4% $ 2,627 $ 2,472 6%
Net income (in millions) $ 256 $ 275 (7)% $ 462 $ 470 (2)%
Diluted earnings per common share $ .18 $ .20 (10)% $ .33 $ .36 (8)%
Pre-tax profit margin 30.8 % 33.7 % 28.3 % 30.1 %

Return on average common stockholders’ equity (annualized)

10 % 13 % 10 % 11 %

Excluding one-time gain in 2012 (1) :

Net revenues (in millions) $ 1,337 $ 1,213 10% $ 2,627 $ 2,402 9%
Net income (in millions) $ 256 $ 231 11% $ 462 $ 426 8%
(1) Net revenues and net income excluding one-time gain in 2012 are non-GAAP financial measures. For a reconciliation of these measures to reported results, see page 8 of this News Release.

CEO Walt Bettinger said, “Schwab’s evolution from transaction specialist to full-service investment firm reflects our deep understanding of the changing needs of investors, as well as the advisors and employers who serve them. More than ever, clients look to us for help as they take ownership of their financial future. Over 430,000 accounts and $138 billion in assets are now enrolled in our retail advisory offers, increases of 12 and 17%, respectively, from a year ago. Including relationships under the guidance of independent advisors, more than 2.6 million accounts and over $980 billion in client assets at Schwab are currently receiving some form of ongoing advice.”

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