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Charles Schwab (SCHW) outclasses Q3 2019 earnings and revenue targets on strong client demand

Investment services firm Charles Schwab (NYSE: SCHW) beat third quarter 2019 earnings results that helped the stock to climb up about 4% in the pre-market trading session. Charles Schwab’s earnings grew 8% to $0.70 per share in the three months ended September 30, 2019 period, while revenue rose 5% to $2.71 billion. Analysts had projected Charles Schwab to post earnings of $0.65 per share on revenue of $2.65 billion for the third quarter.

Charles Schwab (SCHW) outclasses Q3 2019 earnings and revenue targets on strong client demand

Despite the rate cuts in July and September, core net new assets grew 6% to $56.6 billion in the third quarter of 2019 versus $53.5 billion in the prior-year quarter. The online brokerage firm attracted 363,000 new brokerage accounts in the quarter, raising the active brokerage accounts to 12.1 million, up 6% year-over-year. Client assets totaled a record $3.77 trillion at quarter end, up 6%.

The San Francisco, California-based firm’s net interest revenue rose 7% in 3Q to $1.6 billion, due to higher investment yields and higher client cash allocations. Total expenses of $1.5 billion in the third quarter included $62 million in severance charges associated with the elimination of 3% of the company’s workforce.

Read: JPMorgan Chase (JPM) tops Q3 estimates

Earlier this month, Charles Schwab slashed online trade commissions for stocks, ETFs, and options listed on U.S. or Canadian exchanges. Schwab’s peers Interactive Brokers Group’s (NASDAQ: IBKR), TD Ameritrade Holding (NASDAQ: AMTD) and Fidelity had also cut down their trade commissions to $0.

“Our contemporary full-service model helps us remain a trusted partner as clients navigate an environment that has only grown more cloudy in recent months. The equity markets have shown noteworthy durability – the S&P 500 remained up nearly 20% for the year as of quarter-end. Concerns persist, however, regarding global trade and a generally softening economic outlook,” said CEO Walt Bettinger.

Charles Schwab stock had given a negative return in both year-to-date and past 52 weeks periods, declining 9% and 23%, respectively.

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