Charles Schwab's results align with the trends seen in the earnings of major U.S. banks. They exceeded expectations, with the most significant surprise coming from trading revenues, where activity significantly increased after the elections.
Start investing today or test a free demo
Create account Try a demo Download mobile app Download mobile appAs a result, the company recorded its highest net revenue since Q4 2022. Year-over-year, revenue growth reached +20%. In the latter part of the quarter, the average number of daily trades rose significantly, leading to a total of 6.31 million trades for the quarter, compared to the 6.04 million forecasted. If this trend continues, as indicated by the sector's post-election environment, Charles Schwab could see strengthened sales performance in upcoming quarters. However, it is worth noting that the company still primarily generates net interest income, which accounted for over 47% of total net revenues.
This figure is likely to decline in the event of interest rate cuts, putting pressure on the trading revenue segment to compensate for losses from reduced interest income.
In terms of adjusted earnings per share, the company achieved $1.01, significantly exceeding the forecasted $0.91.
Q4 2024 Financial Results:
- Adjusted EPS: $1.01, estimate: $0.91 (Bloomberg consensus)
- Net revenue: $5.33 billion, estimate: $5.19 billion
- Total net new assets: $108.4 billion
- Average daily trades: 6.31 million, estimate: 6.04 million
- Revenue per trade: $2.20, estimate: $2.19
- Net interest revenue: $2.53 billion, estimate: $2.43 billion
- Bank deposit account fees: $241 million, estimate: $202.7 million
- Trading revenue: $873 million, estimate: $841.1 million
Today's results led to a sharp rise of over 3% in the company's stock price. The share price approached $83.4, a resistance level from November, but the positive sentiment was not enough for the stock to break through this level. Source: xStation
The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.
