Charles Schwab (SCHW) said Monday that its earnings rose to 18 cents a share in the third quarter on net income of $220 million, compared to 10 cents a share on net income of $124 million, a year earlier, missing estimates by 1 cent.
Net revenue grew 11% to $1.18 billion from $1.06 billion a year ago, and pre-tax margin for Q3'11 was 30.5% vs. 18.7% last year.
During the third quarter, the average number of daily revenue trades was 323,100, a 39% year-over-year increase and a 22% sequential increase. However, average revenue per revenue trade fell 2% both from last year and from last quarter to $12.04.
Third quarter 2011 results include non-recurring costs relating to the acquisition of optionsXpress Holdings Inc. totaling $10 million after-tax, according to the company.
"Our unique combination of full-service, high-value brokerage continues to perform well and deliver growth despite a difficult economic environment," said President and CEO Walt Bettinger in a press release. "Although the environment weakened further during the third quarter, our clients stayed with their long-term investing plans."
"We ended September with a total of 2.4 million accounts at Schwab either enrolled in retail advisory offerings or under the guidance of an independent advisor, an increase of 153,000 over September 2010," Bettinger continued. "During the quarter, we … executed a record 1,005,000 trades on a single day in August during the height of recent market volatility."
According to the Schwab CEO, net new assets totaled $86 billion for the third quarter–excluding the optionsXpress acquisition and major clearing inflows, while core net new assets totaled $17.6 billion, up 21% from last year. In addition, he says, clients opened 191,000 new brokerage accounts during the period, up 14% from a year ago.
The firm ended the quarter with 8.5 million active brokerage accounts, 769,000 banking accounts, and 1.46 million retirement plan participants. Client assets totaled $1.58 trillion at the end of September, up 7% from a year ago, but down 5% from the second quarter.
