Charles Schwab and PNC Financial Services lead the Q4 earnings season's next round of brokers and banks announcing results Wednesday morning. SCHW stock and PNC stock both moved lower.
Over the past few years, banks saw surges in deposits and investments during the coronavirus pandemic's era of low interest rates and massive federal stimulus support. But investment banking revenue started falling in the second half of fiscal 2021, after the Federal Reserve began hiking interest rates — circumstances that would normally benefit banks.
Charles Schwab Earnings
The New York-based broker's earnings and revenue grew for the third consecutive quarter. Charles Schwab earnings fell 7% in Q1 2022, the company's only decline in the last nine quarters. Revenue has grown throughout that period, barring the first quarter when revenue was flat year-over-year.
Expectations: Analysts expected Schwab's adjusted earnings to jump 26% to $1.09 per share on 18% revenue growth to $5.55 billion.
Results: Charles Schwab's adjusted earnings rose 24.5% to $1.07 per share on 17% revenue growth to $5.5 billion.
Net interest income increased for the ninth consecutive quarter, leaping 41% to $3.03 billion. Wall Street predicted a 39% spike to $2.99 billion for the most recent period.
SCHW stock fell 2.5% on Wednesday following the results. Shares are up roughly 24% over the past three months but down 12.6% over the last year.
SCHW stock is just shy of its all-time highs from last January. The stock is trading in the buy zone for a cup-with-handle base after passing the 81.18 buy point in late November. The pattern's current buy zone extends to 85.24.
PNC Financial Earnings
PNC revenue increased for the past six quarters, with gains accelerating for the past four quarters including Wednesday's report. Earnings declined again after two positive quarters of growth.
Expectations: Wall Street saw adjusted earnings rising 7.8% to $3.97 per share on 11.3% revenue growth to $5.7 billion.
Results: PNC adjusted earnings fell 5% to $3.49 per share and revenue rose 12.4% to $5.76 billion.
Net interest income rose for the seventh straight quarter, jumping 29% to $3.68 billion. Analysts expected net interest income to leap 31% to $3.74 billion. During the fourth quarter, PNC increased its provision for credit losses to $408 million, compared to its release of $327 million last year.
PNC stock fell 6% Wednesday following the results. Shares are up 4% over the past three months, but have logged a loss of more than 27% over the past year.
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