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Schwab Profits Rise 11% in Q3

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Charles Schwab (SCHW) said Wednesday its third-quarter net income was $321 million, up 11% from last year but down slightly from the second quarter of 2014. Its total revenue improved 13% to $1.55 billion vs. $1.37 billion a year ago.

Net income available for shareholders was $312 million, or $0.24 per share, compared with $282 million, or $0.22 per share, in Q3’13.

This met analysts’ estimates for per-share earnings, according to Thomas Reuters, and topped revenue expectations of $1.49 billion.

The company says its financial results for the third quarter include two non-recurring items: a net insurance recovery of about $45 million and a charge related to future changes in the company’s geographic footprint of $68 million. Combined, the two items reduced pretax income by roughly $23 million, or $0.01 per share.

“Our full-service investing model continues to resonate with clients and drive business growth. During the third quarter of 2014, we gathered $34.7 billion in net new assets – a 6% annualized growth rate – and we ended the quarter with $2.40 trillion in total client assets, up 12% from last September,” said CEO Walt Bettinger in a press release.

“Including relationships under the guidance of independent advisors, $1.19 trillion in client assets at Schwab are currently receiving some form of ongoing advisory service, an increase of 15% versus year-ago levels,” Bettinger said.

Advisor Services’ Results

Assets held in Advisor Services accounts totaled $1.08 trillion, up from $949 billion a year ago and down slightly from $1,080.9 billion in Q2’14.

Net new assets in Advisor Services accounts were $16 billion in the quarter, vs. $13 billion in the second quarter and $15.7 billion a year ago.

Schwab says advisors using its OpenView Gateway platform will benefit from Morningstar’s expanded participation in the program. The company added 65 exchange-traded funds to Schwab ETF OneSource in the quarter, allowing investors to trade 182 ETFs covering 65 Morningstar categories without paying any online trade commissions.

Check out ThinkAdvisor’s 2014 Q3 Earnings Calendar for the Finance Sector.


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