Charles Schwab (SCHW) reported second-quarter earnings early Tuesday of $0.18, down from $0.20 a year ago and $0.01 below consensus views. Net income was $233 million, an 11% drop from last year.
Adjusted revenue rose 4% to $1.34 billion, which surpassed analysts’ estimates. Schwab says, however, that it had a nearly 9% jump in expenses, which (excluding interest) were $925 million in the period.
“While year-over-year growth in total revenues and net income for the second quarter was limited by last year’s $70 million pretax gain, the signs of our building earnings power are clear,” said CFO Joe Martinetto, in a press release. “Strength in asset gathering and advice enrollments helped asset management and administration fees grow 15% over the second quarter of 2012.”
Schwab’s net new assets hit $22.6 billion in the latest period. This was a 41% gain from a year ago, but represented a drop of 47% from the prior quarter.
Second-quarter trading revenue improved 7% from last year to $235 million. These sales now represent less than 20% of total revenue.
Asset management and administration fees rose 15% year over year to $572 million. Daily average revenue trades increased close to 6%.