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MarketScreener Homepage  >  Equities  >  Nyse  >  The Charles Schwab Corporation    SCHW


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Charles Schwab Corp : Charles Schwab's 4th-Quarter Net Jumps 29% on Fee Growth, Lower Waivers

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01/16/2013 | 09:28am EST
   By Saabira Chaudhuri 

Charles Schwab Corp.'s (SCHW) fourth-quarter earnings rose 29% as the discount brokerage recorded strong asset management and administration fee growth, although trading revenue declined.

Results beat the company's own estimates, but were roughly in line with Wall Street expectations.

Like its peers, Schwab has been grappling with a continuing industry-wide decline in trading activity, and trading volumes have been mostly down of late due to ongoing concerns about Europe as well as the normal holiday slowdown.

The brokerage firm is less dependant on trading activity than its rivals, however, and is more affected by the performance of its bread-and-butter asset management and administration fees. Revenue in that business had been hurt though, because Schwab has been waiving some fees on its money market funds because of low interest rates the past few years.

For the quarter, money-market fee waivers at the brokerage fell 15% to stand at $142 million. Schwab's asset-management fees rose 18% from the year-earlier period to $539 million.

Daily average revenue trades were down 14% from a year earlier, while average revenue per trade climbed 2.3%. Schwab's trading revenue fell 13% to $202 million.

Chief Executive Walt Bettinger said core new assets for December were a record $22.6 billion, 28% higher than the previous record set in March 2008.

Chief Financial Officer Joe Martinetto said the firm has "made further progress in building non rate-sensitive sources of revenue, including an 11% increase in fees from rising balances in our proprietary advice solutions," during 2012. "Our fourth-quarter results illustrate the company's improved momentum heading into 2013, with year-over-year revenue growth of 9% and a 29% increase in net income," he said. "Looking ahead, we believe that Schwab's financial story will remain driven by the three key themes of strong business growth, diversified revenue streams, and expense discipline."

Overall, Schwab reported a profit of $211 million, or 15 cents a share, versus a year-earlier profit of $163 million, or 13 cents a share. Revenue rose 9.2% to $1.22 billion.

Analysts polled by Thomson Reuters were recently looking for a per-share profit of 15 cents on $1.21 billion in revenue. In December, Schwab had estimated net income growth of roughly 25% and revenue growth of about 8% over the year earlier, pointing to controlled expenses and a larger client base.

Wednesday, the firm reported total expenses excluding interest edged up 1.2% to $871 million.

Last week, Schwab said its investment management business would join several other firms in posting the daily per-share market value for its U.S. money market funds. The discount brokerage said it will start reporting the information later this quarter.

Shares closed Tuesday at $15.29 and were inactive premarket. The stock has climbed 26% in the past 12 months.

Write to Saabira Chaudhuri at saabira.chaudhuri@dowjones.com

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

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Financials (USD)
Sales 2020 10 727 M
EBIT 2020 4 547 M
Net income 2020 3 335 M
Finance 2020 32 704 M
Yield 2020 1,71%
P/E ratio 2020 16,9x
P/E ratio 2021 15,8x
EV / Sales2020 2,20x
EV / Sales2021 2,45x
Capitalization 56 265 M
Duration : Period :
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Technical analysis trends THE CHARLES SCHWAB CORPORA
Short TermMid-TermLong Term
Income Statement Evolution
Mean consensus OUTPERFORM
Number of Analysts 19
Average target price 54,22  $
Last Close Price 43,80  $
Spread / Highest target 46,1%
Spread / Average Target 23,8%
Spread / Lowest Target 11,9%
EPS Revisions
Walter William Bettinger President, Chief Executive Officer & Director
Charles Robert Schwab Chairman
Joseph Raymond Martinetto Chief Operating Officer & Senior Executive VP
Peter B. Crawford Chief Financial Officer & Executive Vice President
Tim Heier Chief Technology Officer & Executive VP
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