Brokerage Charles Schwab's
Schwab's fourth-quarter net income came in at $53 million, or $0.04 per share. Its revenues were flattish at $1.06 billion. However, its fourth-quarter numbers included $111 million in charges related to restructuring. Excluding the charges, earnings came in at $164 million, or $0.12 per share, which beat estimates by a penny.
It's no secret to investors that Schwab has been going through lots of changes over the last six months or so, some painful. Whether it was cutting fees or cutting jobs, or bringing Charles Schwab himself back to the helm, it's been a tough phase for fans of this once-pioneering stock, which happens to be a Motley Fool Stock Advisor pick.
The lesson is not lost that the more Schwab diversified over the years -- and charged premium pricing for more in-depth services -- the more difficulty it had competing with other online brokerages like E*Trade
However, as Schwab works to fix what's been ailing it, there are signs of rosier times ahead. Client activity picked up as the market improved, and Schwab said that in December, 56,000 new accounts were opened, a 37% increase from the month before and its best month in that regard since last April. The company still shows its strength through its total client assets, which were up 12% at $1.08 trillion.
Given Schwab's pioneering history and strengths, investors can hope that today is the beginning of better times for the brokerage. However, for those investors who are looking to invest in the brokerages, Schwab's P/E of 34 makes it look pricier than some of its peers right off the bat. Apparently there's already a lot of optimism in the company's return to dominance.
Regardless, given the possibility of Charles Schwab's return, its road to recovery may end up exemplifying one of our favorite Foolish lessons: the importance of operational focus. Sometimes the best plan is to focus on what one does best.
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Alyce Lomax does not own shares of any of the companies mentioned.