Charles Schwab announced its outlook for the third quarter Tuesday, saying it is likely to meet or beat the Streets projections with a profit of at least 9 cents a share, Reuters reports. Furthermore, Chief Financial Officer Christopher Dobbs told Reuters that customer trading has returned to robust levels.
In the first nine days of the month, there were an average of 164,000 trades a day a 29% increase from the month before. In addition, assets under managed stood at $875.9 billion, up 14% from a year earlier. Furthermore, margin loans, which are quite profitable for brokerages, have increased to a current level of $7.5 billion at Schwab.
This certainly reverses news over the past three years from Schwab, which, like other brokerages, has been hit hard by investors disenchantment with the equity markets and subsequent steep decline in trading. As a direct result of this lackluster business environment, by the end of this year, Schwab will have laid off 9,250 people and closed 43 branches since 2001.
In the first quarter of the year, Schwab reported a 22% decline in trading volume and a 24% drop in profits to $71 million, the firm's weakest quarter in four years.
But on Tuesday, Dodds told Reuters: "In our mind, September is a really important month, and thus far, it has proven to be quite strong in terms of investor engagement. Its looking good."