Charles Schwab reported a big earnings jump Monday, as investors cautiously eye industry results following the recent rout of banking stocks. SCHW stock rose after reversing lower in early Monday trading, struggling to turn a six-week sell down. Among Monday's other bank earnings, M&T Bank rallied, while asset manager State Street crumbled.
JPMorgan and Wells Fargo kicked off bank earnings Friday with better-than-expected results. For Schwab, owner of TD Ameritrade, outlook, deposits and net interest margins were in focus as investors worry about contagion from the Silicon Valley Bank and Signature Bank panics spreading to Charles Schwab.
The company defended its financial status in March, noting it has a low loan-to-deposit ration. Charles Schwab reported $53 billion in net new client assets in March, the second-highest results for the month in company history, the top brass announced in early April.
Charles Schwab Earnings
Estimates: Analysts polled by FactSet expected Charles Schwab earnings to rebound nearly 17% year over year to 90 cents per share. Revenue was seen bouncing 10% to $5.137 billion.
Results: Schwab adjusted earnings leapt 20% to 93 cents per share while revenue rose 10% to $5.116 billion.
Net interest income spiked 26% to $2.77 billion. Trading revenue declined 7% to $892 million. Bank deposits tumbled 30% to $325.7 million while total assets fell 21% to $535.6 million.
Charles Schwab decided to pause its share buyback program in light of the recent banking events and regulatory uncertainty, the company announced.
Outlook: Analysts forecast Q2 earnings of 85 cents per share, down 12% year over year. Wall Street projects full-year earnings of $3.63 per share, down roughly 7% from 2022.
Schwab Stock
SCHW stock rose 3.9% Monday to 52.77 after sliding more than 2% after the opening bell. Shares initially popped more than 2% premarket following results. SCHW stock sunk 36.6% so far this year following the March bank panic.
M&T Bank Rises On Earnings Beat
Meanwhile, Buffalo, N.Y.-based M&T Bank surged after beating earnings estimates early Monday.
M&T Bank earnings bolted 53% to $4.01 per share while revenue leapt 66% to $2.4 billion. FactSet analysts expected EPS of $3.94 on $2.38 billion in revenue. Net interest income doubled over the year to $1.818 billion, from $904 million in Q1 2022.
MTB stock surged 5.2% to 122.70 during trading Monday to continue its premarket rally after initially sliding 1.75% after the opening bell. Shares tumbled roughly 13.4% year to date.
State Street Earnings Miss
Asset custodian State Street missed earnings estimates, reporting a 3.2% EPS decline to $1.52 while revenue ticked up to $3.1 billion. Analysts expected earnings of $1.65 per share on $3.12 billion in revenue.
STT stock retreated 9.3% to 72.61 Monday, tumbling as much as 18% following results. Shares are down 6.4% so far this year.
You can follow Harrison Miller for more stock news and updates on Twitter @IBD_Harrison
