Charles Schwab (NYSE:SCHW)
On Monday, Charles Schwab (NYSE:SCHW) reported its first-quarter earnings. While the brokerage giant’s net interest income increased year over year due to higher interest rates, bank deposits and trading revenue both fell. In early market action, Charles Schwab stock was up 1.2%.
“While bank deposits decreased by 11% compared to the prior year’s end as clients realigned their allocations across our expansive selection of transaction and investment cash solutions, we observed a decline in the average daily pace of bank sweep movements from January to March,” said the CFO of the company, Peter Crawford. “This was the case even when accounting for a temporary spike in activity at the beginning of the banking system turmoil.”
Due to “recent events within the U.S. banking sector and the resulting regulatory uncertainty,” he said, “the company has decided to pause its active share buyback program.”
The company’s adjusted EPS of $0.93 in Q1 was above the average analyst forecast of $0.90, although down from Q4 2022’s $1.07 but up from the previous year’s $0.77.
The company’s net sales of $5.12B were below the average estimate of $5.13B, down from $5.50B in Q4 and up from $4.67B in Q1 of the previous year.
For the three months ending March 31st, net interest revenue was $2.77B, down from $3.03B in the previous quarter but up from $2.18B in Q1 2022.
The costs for managing and administering assets were $1.12B, up from $1.05B in the fourth quarter and $1.07B the year before.
Lower trading income of $892M compared to $895M in Q4 and $963M in Q1 2022.
With a total of $106.5B, bank deposit account balances fell 16% from the previous quarter and 31% from the same time a year ago. Meanwhile, $357.8B was invested in money market funds, up 28% from Q4 and 150% from a year earlier.
Total costs increased from $2.90B in Q4 to $2.83B in Q1 2022 to $3.01B in Q2 2022.
At nine in the morning Eastern Time, Charles Schwab stock will host its Spring Business Update for large investors.
Non-GAAP EPS of $0.93 for Charles Schwab earlier surpasses $0.03, while sales of $5.12B fall short by $10M.
Featured Image: Unsplash @ PiggyBank
