Podcast Center
Video Center
Webcasts
Resource Center
Events
April 15, 2011 at 07:37 AM
Charles Schwab Corp. (SCHW) reported Friday that net income in the first quarter of 2011 was $243 million, or $0.20 in earnings per share, slightly beating analysts’ earnings consensus, versus profits of only $6 million in the first quarter of 2010.
Net revenues in the first quarter of 2011 increased 23% to $1.20 billion compared $978 million in the year-ago period.
Schwab Advisor Services, which custodies assets for more than 6,000 registered investment advisors, sawassets rise 10% from Q1 2010 to $688.6 billion, which also represents a 5% increase over fourth-quarter 2010 assets in the RIA channel. But net new assets in Advisor Services were $14.2 billion in the first quarter, a 3% decline from the prior year and a 13% drop from the fourth quarter.
For the entire company,Q1 2011 net new assets declined 1% of $23.0 billion from last year and a 12% decline from the fourth quarter.
Schwab’s retail arm, Investor Services, however, saw a 30% rise in net new assets of $5.7 billion from the year-ago period, and a 14% rise from the fourth quarter. New brokerage accounts totaled 224,000 in the first quarter, a 3% decline year over year and a slight decline from the 225,000 new accounts opened in 2010’s fourth quarter.
The consensus of analysts as reported by FactSet Research was for Schwab to report a Q1 profit of $0.19 per share for the quarter. Prior to Schwab’s release of earnings, Citigroup’s William Katz wrote in an analyst’s note that he was lowering his full-year 2011 earnings forecast for Schwab to $0.80 per share from $0.85 per share, citing “lower interest rate assumptions” and restructuring costs related to Schwab’s acquisition of optionsXpress.
In the formal announcement of earnings, Chairman Charles Schwab noted that “approximately $800 billion of the client assets currently at Schwab are either enrolled in one of our advisory offerings or under the guidance of an independent advisor,” up 16% from 2010’s first quarter. He also reported that Schwab clients had reduced the percentage of their assets at Schwab held in cash to “pre-crisis levels.”
