Schwab Sees Net Income Leap 96%

Discount brokerage Charles Schwab Corp., which has moved rapidly to be a leader in online trading, on Monday said net income rose as much as 96% in the first quarter as client trades in March were more than double the year-earlier figure.

San Francisco-based Schwab said it expected to report a profit of $265 million to $280 million, or 31 cents to 33 cents a share, when it officially reports results in about two weeks. That would top the 26-cents-a-share forecast of nine analysts polled by First Call/Thomson Financial. Schwab’s revenue soared about 63% to $1.55 billion.

Schwab clients made a record average 320,000 commission trades a day in March, compared with 155,200 in March 1999. Also, CyBerCorp Inc., a brokerage catering to active traders that Schwab acquired last month, saw its clients make an average of 18,000 daily trades.

For online brokers such as Schwab, the first-quarter trading surge was driven by a $100-million-a-month blitz for new clients and big price swings in shares of widely held consumer products and Internet companies. Nasdaq Stock Market volume rose 34% in the first quarter to 1.7 billion shares daily.

The volume surge has led to longer waits for Schwab clients trying to use automated touch-tone telephone trading and the company’s Web site. Co-Chief Executives Charles Schwab and David Pottruck last month sent clients a letter of apology for slow service.

Schwab shares rose 44 cents to close at $57.44 on the New York Stock Exchange. The stock is up 50% so far this year.

Higher online trading activity is seen benefiting the entire online brokerage industry. National Discount Brokers Group Inc. announced earnings last month that far exceeded estimates.