Charles Schwab topped Wall Street expectations early Tuesday despite a challenging quarter for the Texas-based broker. Schwab stock leapt Tuesday following results.
Charles Schwab adjusted earnings tumbled 23% to 75 cents per share while net revenue fell 9% to $4.66 billion. Analysts polled by FactSet expected earnings of 71 cents per share on $4.61 billion in revenue.
Schwab's earnings growth decelerated the last four quarters but averaged 28.8% gains leading up to results. During that time, revenue growth accelerated from 13% growth last year to 32% growth last quarter.
Net interest revenue fell about 10% to $2.29 billion for the quarter. Total interest revenue soared to $4.1 billion from $2.71 billion last year, but interest expenses ballooned to $1.8 billion from $166 million in 2022.
Bank deposit account fees roughly halved to $175 million while trading revenue declined by 9.3% to $803 million. Asset management and administration fees increased 11.5% to $1.17 billion.
Charles Schwab added $52 billion in core net new assets during the quarter, bringing the total so far this year to $180 billion, CEO Walt Bettinger noted in the report.
"While we observed signs of typical tax seasonality, as well as softer investor sentiment at the beginning of the quarter, we still attracted nearly 1 million new brokerage accounts and finished the period serving $8.02 trillion in total client assets across 34 million accounts," Bettinger said.
Still, bank deposits fell to $304.4 billion, down from $325.5 billion in Q1 and $442 billion last year.
Charles Schwab did not immediately provide an outlook with its results.
Charles Schwab Stock
Schwab stock leapt 12.5% following results to 65.98 Tuesday. SCHW stock is trading well below its 2023 high of 86.63 and tumbled 20.8% so far this year.
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