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Schwab (SCHW) Beats on Q2 Earnings and Revenues Estimates

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Have you been eager to see how Charles Schwab (SCHW - Free Report) performed in Q2 in comparison with the market expectations? Let’s quickly scan through the key facts from this San Francisco-based brokerage company’s earnings release this morning:

An Earnings Beat

Schwab came out with earnings per share of 60 cents, beating the Zacks Consensus Estimate of 58 cents.

Results benefited from improved revenues.

How Was the Estimate Revision Trend?

You should note that the earnings estimate revisions for Schwab depicted a pessimistic stance prior to the earnings release. The Zacks Consensus Estimate has moved 1.7% lower over the last seven days.

Also, Schwab has delivered positive surprises in three of the prior four trailing quarters. Overall, the company has a positive earnings surprise of 2.9% in the trailing four quarters.

Better-than-Expected Revenues

Schwab posted net revenues of $2.49 billion, which surpassed the Zacks Consensus Estimate of $2.48 billion. Also, it compared favorably with the year-ago number of $2.13 billion.

Key Q2 Statistics:
 

  • Net income jumped 51% year over year to $866 million
  • Return on equity was 19% as of Jun 30, 2018
  • A steady focus on serving investor needs has helped Schwab’s business grow to $3.40 trillion in client assets as of Jun 30, 2018
  • Increase in average interest-earning assets by 13% to $243.8 billion at the end of the reported quarter


What Zacks Rank Says

The estimate revisions that we discussed earlier have driven a Zacks Rank #3 (Hold) for Schwab. However, since the latest earnings performance is yet to be reflected in the estimate revisions, the rank is subject to change. While things apparently look favorable, it all depends on what sense the just-released report makes to the analysts.

(You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.)

How the Market Reacted So Far

Following the earnings release, Schwab shares were up 3.4% in the pre-trading session. This is in line with what the stock witnessed in the prior-day’s session. Clearly, the initial reaction shows that the investors have considered the results in their favor. However, the full-session’s price movement may indicate a different picture.

Check back later for our full write up on this Schwab earnings report!

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