Brokerage stock to watch: Charles Schwab Corporation Common Stock (NYSE: SCHW)

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Charles Schwab Corporation Common Stock (NYSE: SCHW) recovered over 1.8% on 20th April, 2020 (as of 12:09 pm GMT-4; Source: Google finance). However, the stock fell over 25% in this year to date (Source: Finviz.com).

On the other hand, the company reported 18% fall in the net income to $795 million from a year prior. The company has posted mixed results for the first quarter of FY 20. During the first quarter, the company’s balance sheet expanded by $77 billion during the quarter to $371 billion at March 31st.

The clients had opened a record 609,000 new brokerage accounts in the quarter with more than 280,000 in March alone, bringing the total active brokerage accounts at the end of the quarter to 12.7 million, reflecting an increase of 8% from March 2019. At the same time, the clients continued to set multiple single-day records for trading, which has resulted in 27 of the 30 highest volume days in the company’s history, that also includes every trading day in March. During the first quarter, the company had handled a peak of 4 million trades on March 12th and a 217% year-over year increase in daily average trades for March alone. The Retail call volumes rose 16%, reaching the highest levels measured since 2003, and mobile logins up about 35% from a year ago. With the S&P 500 experiencing its worst quarter since 2008, the client asset valuations were inevitably affected, the company’s total client assets ended March at $3.50 trillion, which reflects the decline of 2% from a year ago.

SCHW in the first quarter of FY 20 has reported the adjusted earnings per share of 58 cents, missing the analysts’ estimates for the adjusted earnings per share of 62 cents, according to FactSet. The company had reported 3.9 percent fall in the adjusted revenue to $2.62 billion in the first quarter of FY 20, beating the analysts’ estimates for revenue of $2.61 billion.

Meanwhile, at the start of the year, the company had launched Schwab Intelligent Income, that is offering clients with an intuitive, low-cost way to generate a predictable paycheck during retirement, or any other time, from their investment portfolios. The initial enrollments are running at about twice the average portfolio balance of other Schwab Intelligent Portfolio Solution. In late February, the company has signed a definitive agreement to acquire Wasmer Schroeder, which will add established strategies and new separately managed account offerings to our existing fixed income lineup. Both of these advisory solutions are part of the continuing work to build differentiated asset management capabilities to better meet the clients’ needs.

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