Charles Schwab Q1 Profit Misses Expectations

reported weaker-than-expected earnings for the first quarter on Wednesday. The San Francisco, California-based company reported a quarterly profit of $302 million, or $0.22 per share, versus a year-ago profit of $326 million, or $0.24 per share. Its revenue climbed to $1.53 billion from $1.48 billion. However, analysts were expecting a profit of $0.24 per share on revenue of $1.54 billion. Trading revenue slipped 8 percent. Asset management and administration fees climbed 5 percent, while net interest revenue gained 6 percent. New retail brokerage accounts surged 9 percent to 6.7 million. CFO Joe Martinetto commented, "Even as our business growth remained strong, environmental factors contributed to a disappointing rate of revenue growth for the first quarter. Our revenue picture was shaped by an environment that included volatile equity market performance, largely flat-to-lower interest rates, and client trading activity that slowed as the quarter progressed. While that trading slowdown resulted in an 8% decline in trading revenue from the first quarter of 2014, our continued strength in gathering client assets helped asset management and administration fees and net interest revenue increase by 5% and 6%, respectively, resulting in 3% overall revenue growth for the quarter." The average estimate among 23 Estimize users was for earnings of $0.25 per share and revenue of $1.55 billion. Charles Schwab shares fell 1.52 percent to close at $30.45 yesterday.