posted a fall in first-quarter profit, citing fluctuating client trading and the uncertain economy.
In the quarter ended March 31, the San Francisco-based company earned $71 million, or 5 cents a share, compared with $94 million, or 7 cents a share, in the prior-year quarter. Excluding a $3 million loss from discontinued operations, the company earned $63 million, or 5 cents a share, compared with $111 million, or 8 cents a share, in 2002. Analysts were expecting 5 cents a share.
"Our first-quarter 2003 results remained significantly below our long-term objectives, and we have deferred some of our planned marketing investments, placed further restrictions on hiring and discretionary spending, and suspended our 401(k) match to improve our financial performance," said co-chief executive Charles R. Schwab. In the first weeks of the war in Iraq, the company said client trading activity fluctuated in line with developments in the Middle East, and daily revenue trades ranged from 90,000 to 181,000. So far in April, daily average revenue trades have equaled 110,000.
Co-chief executive David S. Pottruck said, "At this point, investing seems neither emotionally nor financially rewarding."
Total revenue was $900 million, compared with $1 billion in the year-ago period. "The extraordinary confluence of events that emerged during the first quarter affected all of our major revenue sources," said Schwab. "The substantial drop-off in client trading activity we experienced during February and early March caused our trading-related revenues -- commissions and principal transaction revenues -- to decline by 22% from last year."
The company said it ended the quarter with 16,470 employees, down 2% from December 2002. Charles Schwab will continue to focus on expense management.
The company's shares were up 0.4% at $8.67 in early trading.