Schwab Q2 Net Up 16% After Gain

By
July 17, 2012
Share:

 

Schwab, the discount broker and money management firm that rolled out its first ETFs in November 2009, posted a 16 percent rise in second-quarter earnings, including a one-time gain, as total client assets rose 9 percent to $1.802 trillion.

Schwab earned $275 million, or 20 cents a diluted share, compared with $238 million, or 20 cents in the 2011 second quarter. Results in the current-year quarter included an after-tax gain of $44 million related to the previously disclosed resolution of a vendor dispute. Outstanding shares rose, diluting its EPS.

The San Francisco-based firm, which offers some of the cheapest exchange-traded funds on the market, said in a press release it had $6.7 billion in ETF assets at the end of June, or more than 50 percent above the $4.4 billion at the end of the same year-earlier period. Assets in its managed portfolio ETFs were $2.4 billion, down from $2.7 billion a year earlier.

Schwab’s net revenues rose 8 percent to $1.28 billion from $1.19 billion. Total expenses, excluding interest, rose to $851 million from $804 million, the company said. Trading revenue rose 6.4 percent to $219 million from $205 million.

“Environmental headwinds picked up yet again during the quarter, including further declines in long-term interest rates,” Schwab Chief Financial Officer Joe Martinetto said in the press release. “Our second quarter financial performance benefited from the company’s diversified revenue streams as well as our growing client base and expense discipline.”

Among other highlights of the quarter, the company said assets at Windhaven, Schwab’s Boston-based advisory unit specializing in ETF investment portfolios, rose sequentially by 8 percent from 2012’s first to second quarters, to $11.1 billion.

ETF.COM CHANNELS

Want to learn more about smart-beta ETFs? Check out our smart-beta guide, essentials library and ETF screener!

ETF DAILY DATA

REIT fund 'VNQ' topped net creations Thursday, July 30, with inflows of $313 million. The least popular ETF of the day was small-cap 'IWM', which lost about 1.6% of its total assets.

'SPY' and 'DIA' paced State Street's issuer-leading inflows Thursday, July 30. Total U.S.-listed ETF assets ended the day at $2.141 trillion.

ETF.COM ANALYST BLOGS

By Matt Hougan

The median ETF tracks its index perfectly excluding expenses. But different firms and funds perform quite differently.

By Paul Britt

Toss and turn about whether to hedge currency risk, but don’t lose sleep over the derivatives themselves.

By Dave Nadig

With the China A-share market half-broken, ETF investors should be very, very cautious.

By Drew Voros

Price depreciation and continued outflows have made for a tough few years.

ETF INDUSTRY PERSPECTIVE

By Invesco PowerShares

A more in-depth look at the smart-beta survey's results.

By Invesco PowerShares

Smart beta appears to be poised for further growth.