Charles Schwab reported less profits than what Wall Street expected.
Michael Nagle/Bloomberg
Charles Schwab stock is tumbling after the discount broker missed first-quarter earnings and revenue estimates.
Schwab’s (ticker: SCHW) adjusted earnings per share were 77 cents compared with the consensus estimate for 84 cents, according to a survey of analysts tracked by FactSet. Revenue of $4.67 billion was short of the $4.83 billion analysts had expected.
Charles Schwab said its expenses during the quarter went up by 3% to $2.8 billion versus last year. Expenses when adjusted for acquisition and other costs were still up by 4% compared with last year. This was “consistent with our expectations as we invest in our people and our ability to support current and ongoing growth in our client base,” Chief Financial Officer Peter Crawford said in the earnings release.
Schwab had also missed fourth-quarter EPS estimates.
Schwab stock is down almost 10% to $74.55 in Monday morning trading, compared with an 0.1% drop in the S&P 500 index. Shares are down over 11% so far this year, while the index is down about 8%.
Last Wednesday, Morgan Stanley analyst Mike Cyprys made Schwab his Top Pick, seeing a compelling entry point in the shares. At the time he rated the stock at Overweight with a $132 price target.
On average, analysts tracked by FactSet rate Schwab stock at Overweight with a $105.93 price target.
Schwab’s core net new assets for the latest quarter were $120.5 billion, while total client assets were $7.86 trillion, up 11% compared with the previous year
Write to Karishma Vanjani at [email protected]
