Charles in Charge, Again
Charles Schwab (Nasdaq: SCHW) still has it.
The leading discount broker came through with another healthy quarter, and that's saying plenty in an environment in which full-service giants like Bear Stearns (NYSE: BSC), and even fellow discounter E*Trade (Nasdaq: ETFC), are choking on bad investments.
Net revenue climbed 13% to top $1.3 billion during the first three months of the year. The bottom line clocked in even stronger, with profits from continuing operations climbing 29% -- or rising a sharp 37% on a diluted-share basis, to $0.26 a share.
Perhaps more important than the impressive income statement is the continued customer influx Schwab enjoys. The company landed $41.3 billion in net new assets during the period, closing out the quarter with $1.4 trillion in assets under its watch.
That's huge, because market volatility was going to help the top and bottom lines. It's definitely been a wild start to 2008. However, even with lower stock prices and plummeting fixed income yields, investors are still trusting Schwab -- and their own portfolio-managing judgment -- with more of their money. Those customers are sticking by Schwab even as banking giants like Bank of America (NYSE: BAC) and Wells Fargo (NYSE: WFC) try to woo cheap traders with rock-bottom commission schedules.
Naturally, we'll want to see how TD AMERITRADE (Nasdaq: AMTD) and E*Trade are doing before we generalize about the state of discount brokerages, but it won't be much of a wait. Both of those companies will report earnings on Thursday.
Schwab's strong showing hints at solid results. Now let's see whether the rest of the industry backs that up.
More financial Foolishness:
Get the best of the Fool delivered to your inbox every Friday
DocumentId: 621705, ~/articles/articlehandler.aspx, 7/7/2008 1:54:50 AM, No ticker
Terms & Conditions
RSS Headlines
Fool UK