Tags: US | Earns | Charles | Schwab

Schwab's Profit Falls 47 Percent on Revenue Drop

Wednesday, 20 Jan 2010 07:50 AM

Brokerage firm Charles Schwab Corp. said Tuesday that its profit fell 47 percent in the fourth quarter as a result of a drop in trading revenue, low interest rates and waivers on management fees.

For the three months ending Dec. 31, the firm earned $164 million, or 14 cents per share. That compared to $308 million, or 27 cents per share, for the same period a year ago.

Quarterly revenue was $986 million, down 23 percent from $1.28 billion the same time last year.

The performance missed Wall Street expectations. Analysts polled by Thomson Reuters expected a profit of 15 cents per share on revenue of $993.5 million.

For the year, the company's profit fell 35 percent to $787 million, or 68 cents per share.

The San Francisco firm also announced a public stock offering of 26.3 million shares of its common stock, with an option for underwriters to buy another 3.9 million shares.

Proceeds of the offering will be used for growth, the company said, including the potential migration of some balances from money market funds into Schwab Bank.

Charles Schwab said its fourth-quarter revenue from administrative and management fees was $436 million, down 17 percent from $528 million in the year-ago period.

Interest revenue was also severely impacted by continued declines in the short-term interest rate environment, the company said. Revenue from interest fell 18 percent to $305 million from $372 million.

Trading revenue dropped 36 percent to $224 million from $352 million.

The company also recorded a loss of $22 million on investments.

While client trading activity was healthy for the year, trading revenue declined by 8 percent, Charles Schwab said.

The company's shares lost 54 cents, or 2.8 percent, to $18.75 in aftermarket activity. The stock earlier finished regular trading up 29 cents at $19.29.

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Brokerage firm Charles Schwab Corp. said Tuesday that its profit fell 47 percent in the fourth quarter as a result of a drop in trading revenue, low interest rates and waivers on management fees.For the three months ending Dec. 31, the firm earned $164 million, or 14 cents...
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2010-50-20
Wednesday, 20 Jan 2010 07:50 AM
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