Shares of Charles Schwab Corporation (NYSE: SCHW) soared 12.57% on Tuesday after the Texas-based brokerage company posted better-than-expected second-quarter results despite a challenging quarter.
Adjusted earnings for Charles Schwab dropped by 23%, amounting to 75 cents per share, while net revenue fell by 9% to $4.66 billion. Analysts had predicted earnings of 71 cents per share on $4.61 billion in revenue, according to a poll conducted by FactSet.
Although Charles Schwab’s earnings growth has slowed in the past four quarters, it still achieved an average of 28.8% gains leading up to the latest results. During the same period, revenue growth accelerated from 13% last year to 32% last quarter.
Net interest revenue for the quarter fell by approximately 10% to $2.29 billion. However, total interest revenue rose to $4.1 billion from $2.71 billion last year. Unfortunately, interest expenses increased significantly to $1.8 billion from $166 million in 2022.
Bank deposit account fees were reduced by about 50%, amounting to $175 million, and trading revenue declined by 9.3% to $803 million. On the other hand, asset management and administration fees saw a positive growth of 11.5% to reach $1.17 billion.
CEO Walt Bettinger highlighted that Charles Schwab added $52 billion in core net new assets during the quarter, bringing the total for this year to $180 billion. He noted that despite experiencing typical tax seasonality and softer investor sentiment at the beginning of the quarter, the company attracted nearly 1 million new brokerage accounts and currently serves $8.02 trillion in total client assets across 34 million accounts.
However, bank deposits have decreased 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 Corporation NYSE: SCHW SCHW
