Charles Schwab (NYSE:SCHW) stock is gaining 3.5% in Monday premarket trading after its Q2 earnings and revenue beat Wall Street expectations, as clients remained active in the markets even as equity markets dropped and volatility intensified.
The firm benefited from rate hikes, with net interest revenue offsetting lower revenue from asset management and administration fees.
Q2 adjusted EPS of $0.97, topping $0. consensus estimate, increased from $0.77 in the prior quarter and $0.70 in the year-ago quarter. With the markets in bear territory total client assets dropped during the quarter.
"Clients remained engaged during the second quarter even as pressures mounted on the U.S. economy, including rising inflation and the Fed’s corresponding shift to an aggressive tightening stance, ongoing geopolitical turmoil driven by the war in Ukraine, and more-volatile equity markets that are now in bear-market territory," said CEO Walt Bettinger.
Q2 daily average trading volume was 6.2M, up ~3% from year-earlier levels.
Asset management and administration fees of $1.05B vs. $1.07B in Q1 2022 and $1.05B in Q2 2021.
Total net revenue of $5.09B, topping $5.04B consensus, increased from $4.67B in Q1 2022 and $4.53B in Q2 2021.
Net interest revenue of $2.54B vs. $2.18B in Q1 and $1.95B in Q2 2021.
Trading revenue of $885M slipped from $963M in the previous quarter and $955M in the year-ago quarter.
Q2 total expenses, excluding interest, were $2.82B vs. $2.83B in the prior quarter and $2.81B in the year-ago quarter.
Total client assets of $6.83T vs. $7.86T at March 31, 2022.
Q2 core net new assets in June were $40.6B, up 24% M/M and down 7% Y/Y. New brokerage accounts of 305K in June, down 6% M/M and 39% Y/Y.
Schwab (SCHW) will hold its Summer Business Update on July 28, 2022.
Earlier, Charles Schwab (SCHW) non-GAAP EPS of $0.97 beats by $0.06, revenue of $5.09B beats by $50M