Schwab Profit Dips on Trading Decline
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Charles Schwab Corp., the world’s largest discount brokerage, reported a 10% decline in first-quarter operating profit to $108 million, or 8 cents a share, as weak customer stock trading took its toll.
The San Francisco-based company’s revenue declined 9% to $1.2 billion.
The results confirmed a warning Schwab issued last month and matched analyst expectations, according to research firm Thomson Financial/First Call. Trading revenue plunged 30% to $354 million, and Schwab said trading levels so far this month are softer than in March.
“We are still not out of what has been a pretty deep negative hole of investor sentiment,” said Chief Financial Officer Christopher Dodds.
On the positive side, management fees rose 8% to $444 million.
In Big Board trading, Schwab’s shares rose 49 cents, or 4%, to $13.07, along with the broader market.
“I don’t think there’s anything in these results that justify the stock being up today,” said Justin Hughes, an analyst at Robertson Stephens.
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