Charles Schwab Corp. (SCHW, Financial) filed Quarterly Report for the period ended 2012-06-30.
Charles Schwab Corp has a market cap of $16.3 billion; its shares were traded at around $12.985 with a P/E ratio of 19.4 and P/S ratio of 3.5. The dividend yield of Charles Schwab Corp stocks is 1.9%. Charles Schwab Corp had an annual average earning growth of 7.3% over the past 10 years.
Trading revenue increased by $14 million, or 7%, and $16 million, or 4%, in the second quarter and first half of 2012 compared to the same periods in 2011, respectively, primarily due to higher daily average revenue trades. Daily average revenue trades increased in the second quarter and first half of 2012 primarily due to a higher volume of option and future trades as a result of the inclusion of optionsXpress, partially offset by a lower volume of equity and mutual fund trades. Average revenue earned per revenue trade remained relatively flat in the second quarter and first half of 2012 compared to the same periods in 2011.
Other revenue includes nonrecurring gains, software fee revenue from the Companys portfolio management services, education services revenue, exchange processing fee revenue, gains on sales of mortgage loans, and other service fee revenues. Other revenue increased by $86 million and $93 million in the second quarter and first half of 2012 compared to the same periods in 2011, respectively, primarily due to a pre-tax gain of $70 million relating to a confidential resolution of a vendor dispute in the second quarter of 2012. The increase was also due to the inclusion of revenues relating to education services and other service fees from the optionsXpress acquisition.
Net revenues were relatively flat in the second quarter and first half of 2012 compared to the same periods in 2011 primarily due to an increase in trading revenue and other revenue, partially offset by a decrease in asset management and administration fees and higher net impairment losses on securities. Trading revenue increased primarily due to higher daily average trades as a result of the inclusion of optionsXpress option, future, and equity trades from its acquisition in September 2011. Other revenue increased primarily due to the inclusion of revenues relating to education services and other service fees from optionsXpress. Asset management and administration fees decreased primarily due to a decrease in mutual fund service fees, including net money market mutual fund fees and Mutual Fund OneSource fees, partially offset by an increase in revenue from the Companys advice solutions relating to Windhaven. Net impairment losses in the Companys non-agency residential mortgage-backed securities portfolio were higher primarily due to further credit deterioration of the securities underlying loans. Net impairment losses were also higher in the first half of 2012 due to an increase in projected default rates for modified loans in the first quarter of 2012. Expenses excluding interest increased by $40 million, or 7%, and $92 million, or 8%, in the second quarter and first half of 2012 compared to the same periods in 2011, respectively, primarily due to the inclusion of optionsXpress compensation and benefits, depreciation and amortization, and advertising and market development expenses.
Net revenues increased by $11 million, or 3%, and $15 million, or 2%, in the second quarter and first half of 2012 compared to the same periods in 2011, respectively, primarily due to an increase in net interest revenue. Net interest revenue increased primarily due to higher average balances of interest-earning assets, partially offset by the effect of lower interest rate spreads
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Charles Schwab Corp has a market cap of $16.3 billion; its shares were traded at around $12.985 with a P/E ratio of 19.4 and P/S ratio of 3.5. The dividend yield of Charles Schwab Corp stocks is 1.9%. Charles Schwab Corp had an annual average earning growth of 7.3% over the past 10 years.
Highlight of Business Operations:
In comparison to the first quarter of 2012, both the broad equity markets and longer term interest rate environment declined in the second quarter of 2012 the Nasdaq Composite Index, Dow Jones Industrial Average, and Standard & Poors 500 Index decreased 5%, 3%, and 3%, respectively, and the average 10-year Treasury yield decreased by 21 basis points to 1.81%. The three-month Treasury Bill yield increased by 2 basis points to 0.08% from the first quarter of 2012. Despite the challenging environment, the Companys strong key client activity metrics and ongoing expense discipline helped net revenues grow 8% and expenses decrease by 3%, resulting in a 41% increase in net income for the second quarter of 2012 from the first quarter of 2012. The second quarter results include the pre-tax gain of $70 million (after-tax of $44 million) discussed above.Trading revenue increased by $14 million, or 7%, and $16 million, or 4%, in the second quarter and first half of 2012 compared to the same periods in 2011, respectively, primarily due to higher daily average revenue trades. Daily average revenue trades increased in the second quarter and first half of 2012 primarily due to a higher volume of option and future trades as a result of the inclusion of optionsXpress, partially offset by a lower volume of equity and mutual fund trades. Average revenue earned per revenue trade remained relatively flat in the second quarter and first half of 2012 compared to the same periods in 2011.
Other revenue includes nonrecurring gains, software fee revenue from the Companys portfolio management services, education services revenue, exchange processing fee revenue, gains on sales of mortgage loans, and other service fee revenues. Other revenue increased by $86 million and $93 million in the second quarter and first half of 2012 compared to the same periods in 2011, respectively, primarily due to a pre-tax gain of $70 million relating to a confidential resolution of a vendor dispute in the second quarter of 2012. The increase was also due to the inclusion of revenues relating to education services and other service fees from the optionsXpress acquisition.
Net revenues were relatively flat in the second quarter and first half of 2012 compared to the same periods in 2011 primarily due to an increase in trading revenue and other revenue, partially offset by a decrease in asset management and administration fees and higher net impairment losses on securities. Trading revenue increased primarily due to higher daily average trades as a result of the inclusion of optionsXpress option, future, and equity trades from its acquisition in September 2011. Other revenue increased primarily due to the inclusion of revenues relating to education services and other service fees from optionsXpress. Asset management and administration fees decreased primarily due to a decrease in mutual fund service fees, including net money market mutual fund fees and Mutual Fund OneSource fees, partially offset by an increase in revenue from the Companys advice solutions relating to Windhaven. Net impairment losses in the Companys non-agency residential mortgage-backed securities portfolio were higher primarily due to further credit deterioration of the securities underlying loans. Net impairment losses were also higher in the first half of 2012 due to an increase in projected default rates for modified loans in the first quarter of 2012. Expenses excluding interest increased by $40 million, or 7%, and $92 million, or 8%, in the second quarter and first half of 2012 compared to the same periods in 2011, respectively, primarily due to the inclusion of optionsXpress compensation and benefits, depreciation and amortization, and advertising and market development expenses.
Net revenues increased by $11 million, or 3%, and $15 million, or 2%, in the second quarter and first half of 2012 compared to the same periods in 2011, respectively, primarily due to an increase in net interest revenue. Net interest revenue increased primarily due to higher average balances of interest-earning assets, partially offset by the effect of lower interest rate spreads
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