Charles Schwab posts profit beat on robust asset management growth
U.S. brokerage firm Charles Schwab posted a smaller-than-expected drop in quarterly profit on Monday as strength in asset management fees softened the blow from a fall in its net interest revenue.
Charles Schwab's shares surged 6.2%, to $54.49, set for their best day in nearly three months, if gains hold.
The company relies primarily on clients' uninvested cash to fund its interest-earning businesses - like the purchase of fixed-income assets and lending.
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The Westlake, Texas-based company had said in August it would lay off staff and close or downsize some corporate offices as part of its cost-cutting plans.
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Charles Schwab's net interest revenue tumbled 23.5%, to $2.24 billion in the third quarter, reflecting the impact of client allocation decisions within a higher-interest-rate environment, it said.
Its quarterly revenue dropped 16.2%, to $4.61 billion, compared to the same quarter last year, missing analysts' average estimate of $4.63 billion, according to LSEG data.
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Excluding one-time costs, Charles Schwab's profit fell 31% year-over-year, to $1.52 billion, or 77 cents per share, for the three months ended Sept. 30. Analysts had expected 74 cents per share, according to LSEG data.