Charles Schwab said it earned $326 million, or 24 cents a share, up from $206 million, or 15 cents a share, in the same period one year earlier. Analysts had expected 22 cents a share. Revenue increased 15% year over year to $1.48 billion, which edged analysts' expectations of $1.47 billion.
Schwab also said it added $34.2 billion of net new assets in the first quarter, which represents a 6% annualized organic growth rate. New brokerage accounts increased by 258,000, a 6% year-over-year improvement. Schwab also reported a record 550,000 total trades a day in the quarter and an all-time high total client assets of $2.31 trillion.
"Higher levels of client trading activity, balances in fee-based products and services, and cash held at Schwab as part of investing relationships all contributed to the 15% year-over-year increase in revenue we achieved for the first quarter," said CEO Walt Bettinger in a statement.
The stock was up 3.6% to $26.21 at 10:08 a.m. on Tuesday.
Separately, TheStreet Ratings team rates SCHWAB (CHARLES) CORP as a "buy" with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:
"We rate SCHWAB (CHARLES) CORP (SCHW) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, compelling growth in net income, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 7.7%. Since the same quarter one year prior, revenues rose by 13.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- SCHWAB (CHARLES) CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, SCHWAB (CHARLES) CORP increased its bottom line by earning $0.78 versus $0.69 in the prior year. This year, the market expects an improvement in earnings ($0.95 versus $0.78).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Capital Markets industry average. The net income increased by 51.2% when compared to the same quarter one year prior, rising from $211.00 million to $319.00 million.
- 38.73% is the gross profit margin for SCHWAB (CHARLES) CORP which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 21.86% is above that of the industry average.
- Powered by its strong earnings growth of 53.33% and other important driving factors, this stock has surged by 44.56% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- You can view the full analysis from the report here: SCHW Ratings Report