Charles Schwab Posts Mixed Q3 Earnings: Net Interest Revenue Dips Amid Higher Interest Rate Environment
Portfolio Pulse from Lekha Gupta
Charles Schwab Corp reported a Q3 net revenue decline of 16% Y/Y to $4.61 billion, missing the consensus of $4.63 billion. Revenues were impacted by higher-cost funding, a decline in interest-earning assets, and weaker trading volumes. Net interest revenue declined 24% Y/Y to $2.24 billion. Trading revenue declined 17% Y/Y to $768 million, and Bank deposit account fees decreased 50% Y/Y to $205 million in Q3. Asset management and administration fees increased 17% Y/Y to $1.22 billion. Adjusted net income fell 31% Y/Y to $1.52 billion in Q3. Adjusted EPS stood at $0.77, down 30% Y/Y, exceeding the consensus of $0.75.
October 16, 2023 | 1:10 pm
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Charles Schwab's Q3 earnings report shows a decline in net revenue, net interest revenue, and trading revenue. However, asset management and administration fees increased. The company's adjusted net income also fell.
The decline in Charles Schwab's net revenue, net interest revenue, and trading revenue indicates a challenging quarter for the company. This could negatively impact the company's stock price in the short term. However, the increase in asset management and administration fees and the fact that adjusted EPS exceeded consensus could provide some offset.
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