Q2 2015 Earnings Highlights - Report on The Charles Schwab Corporation
NEW YORK, September 28, 2015 /PRNewswire/ --
ACI Association has initiated research coverage on The Charles Schwab Corporation (NYSE: SCHW). Select highlights from the internally released reports are being made available to the general public (included below), with access to the entirety of the research available to new members.
Today, membership is open to readers on a complementary basis at the following URL: http://www.aciassociation.com/SCHW.pdf
Highlights from our SCHW Report include:
- Q2 2015 Financial Performance - In a press release dated July 16, 2015, The Charles Schwab Corporation reported its Q2 2015 financial results. Schwab posted net revenue of $1,566 million, up 6% Y-o-Y, which is also above the Zacks Consensus Estimate of $1,547 million. The Company reported net income of $353 million, representing an increase of 9% from $324 million in Q2 2014. Schwab's diluted earnings rose 9% Y-o-Y to $0.25 per share, surpassing the Zacks Consensus Estimate by $0.01. Results for the quarter included litigation proceeds of c.$17 million related to the Company's non-agency residential mortgage-backed securities portfolio, which lifted earnings per share by a cent.
- Key operational metrics - CEO Walt Bettinger informed that the Company recorded $37.0 billion of core net new assets during the quarter while maintaining a 6% annualized organic growth rate despite seasonal tax outflows in April. Clients opened 280,000 new brokerage accounts, up 16% year-over-year and another second quarter record. Total client assets were $2.54 trillion at quarter-end, up 6% from a year ago. Client assets under the guidance of a registered independent advisor or enrolled in one of our retail or other advisory solutions also rose 6% year-over-year, to $1.26 trillion. At month-end June, the Company served 9.6 million brokerage accounts, 1.0 million banking accounts, and 1.5 million retirement plan participants, up 4%, 6% and 10%, respectively, from the second quarter of 2014.
- Other business highlights - Under the Company's Advisor Services segment, new retail brokerage accounts totaled c.176,000 during the quarter, up 19% Y-o-Y and total accounts as of June 30, 2015 were 6.7 million, up 2% Y-o-Y. The Company held financial planning conversations with c. 29,000 clients and also unveiled Schwab's Apple Watch™ app and Apple® Touch ID™ capability for the Schwab mobile app. Meanwhile, under the Advisor Services segment, the Company launched Institutional Intelligent Portfolios, an automated investment management platform for RIAs such that the firms can create their own set of portfolios choosing from over 450 ETFs across 28 asset classes and all major fund families.
- Management Opinion - CFO Joe Martinetto commented, "We delivered solid financial performance in the second quarter, as our diversified revenue streams helped us work through a mixed bag of environmental drivers and we stayed the course on our planned spending. Interest rates picked up at least slightly across the yield curve during the quarter, which helped limit pressure on our net interest margin. In addition, our strong asset gathering fueled sustained growth in interest-earning assets. As a result, net interest revenue grew by 9% year-over-year and set a new quarterly record."
To find out how this influences our rating on The Charles Schwab Corporation, read the full report in its entirety here: http://www.aciassociation.com/SCHW.pdf
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