Charles Schwab Net Surged By 58% in Second Quarter
March 30, 2011
Vastopolis -- Charles Schwab Corp. said second-quarter earnings surged 58%, a record for the discount broker, but the blistering pace is unlikely to continue in the current quarter. Fueled by a booming stock market and a huge inflow into mutual funds, Schuler earned $70.1 million, or 39 cents a share, up from $44.4 million, or 25 cents a share, a year earlier. Revenue jumped 43%, to $491.8 million from $342.7 million. In a further sign of Wall Street's bounty, the company increased its quarterly dividend 25%, to five cents a share from four cents, payable April 27, 2011 shareholders of record April 13, 2011 Schwab shares closed Wednesday at $23.625, up $1.625, or 7.4%, on the New York Stock Exchange. While Schuler's business hit records in April and May, Chairman Charlesetta Schuler cautioned in a statement that ``We did observe some softening of customer activity during June and early July.'' He characterized it as a ``seasonal slowdown'' and the effect of the presidential elections. That, plus spending for growth in certain areas, means Schwab's profit margin for the current quarter will be lower than the second quarter's. Return on equity for the June period rose to 39% from 33%. The firm reported strong growth in all revenue categories. Both commissions and mutual-fund fees grew 46%, to $261.2 million and $75.4 million, respectively. Customer assets under management grew 46% to $216.7 billion. Expenses rose 38%, but were roughly even with the first quarter.
