The Charles Schwab Corp. (NYSE: SCHW) is expected to report its second quarter FY 2011 financial results on July 18, 2011. In the last four quarters, the company's reported EPS exceeded Wall Street consensus estimates during quarters ended June 2010, September 2010, and March 2011, by margins of 13.30 percent, 11.10 percent, and 5.30 percent. For the quarter ended December 2010, the company's reported EPS met Wall Street estimate of $0.10 per share.
Charles Schwab is one of the original brokerage firms to offer individual investors the opportunity to buy and trade equities at a discount. As of December 2010, the company had $1.57 trillion in client assets, 8 million active brokerage accounts, 1.5 million corporate retirement plan participants and 690,000 banking accounts. The company provides financial services to individuals and institutional clients through two segments – investor services and institutional services.
For Q1 FY 2011
- Charles Schwab's net income was $243 million, up from $6 million for the first quarter FY 2010.
- Diluted earnings per share were $0.20 per share.
- Revenue rose 23 percent to $1.2 billion, from $978 million in the comparable quarter last fiscal.
- Net new accounts totaled approximately 37,000, down 29 percent year-over-year. Total accounts reached 5.6 million as of March 31, 2011, up 4 percent year-over-year.
- Pre-tax profit margin increased to 32.6 percent, from 1.3 percent in the same quarter last year.
- Return to stockholders equity for the quarter was 15 percent.
For FY 2010
For fiscal 2010, Charles Schwab reported net income of $454 million, down 42 percent compared with net income of $787 million in FY 2009. Earnings for the year were $0.38 per diluted share, compared with earnings of $0.68 per diluted share for fiscal 2009. Net revenue for the year was $1.82 billion, down from $1.87 for FY 2009.
During the current quarter, the board of directors declared a regular cash dividend of $0.06 per common share. The dividend was paid to its stockholders on May 20, 2011.
Analysts Forecast
For the second quarter, analysts' EPS estimates range from a low of $0.18 to a high of $0.22 per share, compared with a consensus estimate of $0.17 per share to $0.20 per share in the year ago quarter. For this quarter, analysts' revenue estimates range from a low of $1.16 billion to a high of $1.24 billion, compared with a consensus estimate of $1.08 billion to $1.21 billion in the same quarter a year ago. For the second quarter, the consensus EPS forecast has been decreased from $0.21 per share estimated 30 days ago to the current estimate of $0.20 per share.
In the last 52 weeks, Charles Schwab's shares have been trading in the range of $12.64 to $19.69. The stock is currently trading higher by 0.95 percent to $15.96 on June 28, 2011. During the current quarter, analysts at Ticonderoga upgraded the stock rating to Buy from Neutral.
