Despite declining trading activity industrywide, Charles Schwab Corp. announced Wednesday that it expects third-quarter results will be in line with the previous quarter.
The company, which said it will report $150 million of charges for the third quarter said it expects year-over-year revenue growth for the first time in two years.
Schwab trading volume last month declined 16% from a year earlier and 5% from a month earlier. In July, Schwab had flat profits, but said that they were starting to see signs that the company, and industry, was emerging from its recession.
Despite these conditions, Schwab projected third-quarter earnings of $205 million, not including a $20 million pretax charge related to the closing of a credit-card sponsorship and a charge of about $130 million related to the company covering losses recognized by its money-market mutual funds because of a defaulted investment vehicle.
"With interest rates and equity market valuations remaining at or above their year-to-date lows, our operating performance continues to recover," Joe Martinetto, Schwab's chief financial officer, said in a press release.
Analysts expected net income of $206.8 million and revenue growth of 6%, according to Thomson Reuters.
Schwab said total client assets rose 6% in August from a year earlier to $1.394 trillion, but dropped 2% from July.
“We are poised to resume sequential improvement in revenues and earnings as soon as interest rates and equity valuations stabilize or improve," Martinetto said.
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