SAN FRANCISCO (

TheStreet

) --

Charles Schwab

(SCHW) - Get Report

shares slipped on Friday as the online broker warned for the second consecutive quarter that its profits would miss the analysts' average estimate.

In conjunction with the release of Schwab's monthly trading activity report, the San Francisco-based firm said revenue pressures from low interest rates and higher expenses related to compensation and marketing would bite into earnings for the three months ending March 31. Schwab now expects first-quarter earnings to come in as much as 4 cents a share below its fourth-quarter profit of 14 cents a share.

The current average estimate of analysts polled by

Thomson Reuters

is for a profit of 15 cents a share in the March period.

The broker warned in mid-December a

about its fourth-quarter results

, saying at that time that fee waivers on money market funds pull down profits on a sequential basis from third-quarter levels.

"Our progress in building stronger client relationships remains very much on track and we are increasingly convinced that the interest rate headwinds pressuring our revenues are cresting," CFO Joe Martinetto said in statement on Friday.

"With a mending economy, stabilizing interest rate environment, and strong business momentum, we continue to view 2010 as a year to actively pursue our growth opportunities," Martinetto said. "We remain well positioned to demonstrate improving financial performance as the year progresses even if short-term interest rates do not rise from current levels."

Still Martinetto cautioned that while revenue pressures faced by Schwab "may be cresting, they have yet to subside." It added that: "

Management fee waivers on our money market mutual funds are likely to creep up by approximately 15% between the fourth and first quarters due to the continuing impact of reinvesting maturing assets at lower rates."

Additionally Schwab expects compensation expenses to be 8% higher in the first quarter "as we selectively add project-related and client-facing staff and payroll tax accruals resume with the new year," Martinetto said. It also increasing marketing expenses by approximately 25% over the fourth quarter "as we ramp up a new national advertising campaign heading into tax season, traditionally a period of strong IRA growth for us," he added.

Within the same release

Schwab

said that client daily average trading activity 15% on a sequential basis in February to 302,600 trades.

New and existing clients brought in $7.9 billion of net new assets last month, up from the $6 billion brought in during the prior month. Schwab's client assets totaled $1.43 trillion at the end of February.

Schwab shares were down 2.5% to $18.59 in afternoon trades. Other online broker shares including

TD Ameritrade

(AMTD) - Get Report

and

E*Trade Financial

(ETFC) - Get Report

were also falling slightly on Friday.

--Written by Laurie Kulikowski in New York.