Charles Schwab Corp.’s stock fell 5% Wednesday morning as its fourth-quarter profit dropped by half and its revenue missed Wall Street projections, although its adjusted earnings topped analyst estimates.
Looking back at 2023, the company navigated “an uneven environment with shifting views on the trajectory of the U.S. economy, persistent geopolitical unrest and a temporary disruption within the regional-banking sector,” said Walt Bettinger, co-chairman and chief executive.
Schwab’s
SCHW,
fourth-quarter profit dropped to $1.05 billion, or 51 cents a share, from $1.97 billion, or 97 cents a share, in the year-ago quarter.
Adjusted fourth-quarter profit of 68 cents a share beat the FactSet consensus estimate of 64 cents a share.
Fourth-quarter revenue dropped by 19% to $4.46 billion from just under $5.5 billion in the year-ago quarter and missed the analyst estimate of $4.49 billion.
The company cited “a slightly different trading mix and softer volumes” that caused trading revenue to drop during the year.
Schwab said its December core net new assets exceeded $40 billion, for an annualized growth rate of 6%.
Schwab reported a $15 billion increase in December in transaction-sweep cash, which is money awaiting its next action or destination.
Cash-realignment activity slowed nearly 80% during the second half of the year.
Schwab’s stock was down by $3.27 to $61.04 a share on Wednesday morning.
Before Wednesday’s moves, Schwab’s stock was up 24% in the past three months, compared with a 9% gain by the S&P 500
SPX.
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