Charles Schwab’s stock falls as earnings and revenue per trade decline

United States

Shares of Charles Schwab Corp. fell Monday after the financial-services and brokerage company reported first-quarter earnings that fell as client trading activity increased but revenue per trade continued to decline.

Adjusted profit and revenue just topped expectations, however, as strength in the asset-management business offset misses in trading and bank deposit-account fees.

The stock SCHW, -0.84% slumped 1.5% toward a fifth straight loss in premarket trading, to put it on track to open at a four-week low. It lost 3.2% over the past four sessions.

The company reported net income of $ 1.36 billion, or 68 cents a share, down from $ 1.6 billion, or 83 cents a share, in the same period a year ago.

Excluding nonrecurring items, adjusted earnings per share were down to 74 cents from 93 cents, marking the fourth straight quarter of declines, but topped the FactSet consensus of 73 cents.

Revenue fell 7.3% to $ 4.74 billion, which was slightly above the FactSet consensus of $ 4.71 billion.

Net interest revenue was down 19.4% to $ 2.23 billion, again marginally topping the FactSet consensus of $ 2.22 billion, while asset-management and administration fees increased 20.6% to $ 1.35 billion to beat expectations of $ 1.31 billion, and trading revenue declined 8.4% to $ 817 million to miss expectations of $ 824.8 million.

Bank deposit-account fees were up 21.2% to $ 183 million but missed the FactSet consensus of $ 191.8 million.

Clients’ daily average trades grew 1.1% from a year ago and jumped 14.8% from the previous quarter, to 5.96 million, while revenue per trade fell 7.8% from last year and 4.7% from last quarter to $ 2.25.

Core net new assets totaled $ 95.6 billion in the quarter, including $ 45 billion in March.

The stock has edged up 1.8% year to date through Friday, while the Financial Select Sector SPDR exchange-traded fund XLF, -1.33% has gained 6.5% and the S&P 500 SPX, -1.46% has advanced 7.4%.