Updated from 11:56 a.m. EDT

After just over a year as the sole chief executive of Charles Schwab ( SCH), David Pottruck was asked to step down Tuesday, amid some disappointing financial results. The discount broker also noted that "everything is on the table" regarding its next move.

Founder Charles Schwab, who handed the CEO reins to Pottruck in May of last year, has taken control of the company, effective immediately. He will also continue to serve as chairman.

"We are moving ahead as best we can after what's been a disruptive kind of event to the company," said Chief Financial Officer Christopher Dodds on a conference call.

Schwab, whose new appointment is indefinite, said last year that it was important to split the roles of CEO and Chairman to improve the firm's corporate governance structure. Pottruck and Schwab had served as co-CEOs from Jan. 1998 until May 2003.

Investors seemed to like news of the resignation, which came as the broker reported a 10% decline in second quarter profit, missing analysts' estimates. Schwab rose 5.5% to $8.76.

On the conference call with analysts and investors, Dodds said Schwab is working with consulting firm Bain & Co. to restructure the company and cut costs.

"There are no sacred cows," he said. "Everything is on the table in terms of what we do, what businesses we are engaged in and how much patience we have with this or that."

Dodds said the firm competes in a number of different businesses, some of which are more challenged than others. "We are well aware of the complexities in our business and whether or not all that complexity is affordable or is available to us to earn attractive returns on, that remains to be seen."

Dodds declined to comment on rumors that the company is trying to sell its Soundview Capital Markets unit, which includes institutional trading and research. Schwab acquired Soundview just eight months ago and is expected to book a loss on the sale, indicating a strategic error on the part of management. Speculation has also swirled that the firm might sell its U.S. Trust unit, a private bank acquired in 2000.

Schwab, which has been struggling with intense competition from other online brokers and with a slowdown in trading activity recently, hopes to cut $150 million to $200 million in costs by the end of the year. As part of the cost cuts, the company will continue to slash jobs. During the second quarter, Schwab cut about 200 jobs and it has since eliminated another 250 to 275 positions since the beginning of July, Dodds said.

"We would expect the headcount number to continue to decline through attrition, through some job eliminations and through some continued reduction in temps and contractors," he said.

In the second quarter, Schwab earned $113 million, or 8 cents a share, down from $126 million, or 9 cents a share, a year ago. Revenue rose 9% to $1.11 billion. Analysts surveyed by Thomson First Call were forecasting earnings of 9 cents a share on revenue of $1.11 billion.

Schwab's results contrasted somewhat with those of Ameritrade ( AMTD), which also reported Tuesday. Ameritrade saw earnings rise 24% to $62 million, matching the consensus estimate despite lower-than-expected sales. For a full story, click here .

"We are clearly seeing, especially amongst the nonactive trader base of the company, some fairly significant lack of engagement," Dodds said. "I wish I could tell you when that could turn but as we've said...there are a lot of things that are weighing on the minds of investors."

Dodds said investors are worried about Iraq and the uncertainty over the upcoming election, among other things. Daily average revenue trades declined by 20% from the first quarter average, and outstanding margin loans ended the quarter at $9.1 billion, unchanged from the end of March. Average trades per day fell to 126,000 in June from 165,000 in April, Dodds said, and trading in July has been comparable to June so far.

The company's increased marketing spending and improved employee bonuses in the second quarter limited the sequential decline in expenses to 1%.

Under intense competition from companies like Ameritrade and E*Trade ( ET), Schwab said it would reduce pricing for online equity trades and cut commissions for a wide range of clients in May. Although analysts deemed the move necessary, they said it could hurt the firm financially if it did not increase trading activity and asset flows enough to offset the lost revenue.

Morgan Stanley analyst Scott Patrick said Pottruck's resignation came in response to some recent missteps. "In particular, the Soundview acquisition, which represented a doubling down in a business that was experiencing difficulties, has failed to ignite improved performance."

He also noted that the company's significant investment in Schwab Personal Choice "has yet to stem account attrition at the company" through May. Schwab Personal Choice, which was launched in February, provides investors with a range of trading, investing and advice services tailored and priced to their specific needs.

Analysts believe things could get tougher for Schwab as the summer progresses. Weakness in retail trading activity shows no signs of improving and concerns over high oil prices and interest rates could well persist for some time. Still, Morgan's Patrick said he is encouraged by recent initiatives at Schwab to cut expenses and improve its position in a competitive market.

Despite the increase in Schwab's stock Tuesday, shares are still down 26% since the start of the year and are off almost 80% since March 2000. E*Trade gained 5% to $10.23 Tuesday while Ameritrade jumped 10% to $10.40.

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