Charles Schwab Corporation (NYSE:SCHW) missed the analysts’ estimates

Charles Schwab Corporation (NYSE:SCHW) stock fell 0.69% (As on Jan 19, 11:03:42 AM UTC-4, Source: Google Finance) after the company missed the analysts’ estimates for the fourth quarter of FY 21. The balance sheet expanded to end 2021 with total assets of $667 billion, up 22% versus December 31, 2020. Last year’s increase was driven mainly by client asset flows, as well as approximately $10 billion in bank deposit account migrations. The company has also added a net $10.2 billion to outstanding debt largely for liquidity management purposes, and increased preferred stock by $2.3 billion to help support continued business growth. The company’s preliminary Tier 1 Leverage Ratio was 6.2% at year-end 2021. The core net new assets set yet another record over the final three months of 2021 at $162.2 billion. Clients brought the company $80.3 billion in December alone, 28% above the prior single-month record, and the full-year total of $558.2 billion represents an 8% annual organic growth rate. The company has ended the year with $8.14 trillion in client assets across 33.2 million brokerage accounts, increases of 22% and 12%, respectively.

With interest rates stabilizing and even rebounding somewhat to end above year-end 2020 levels, fourth quarter net interest revenue increased 18% over the year-earlier period, as strong asset gathering helped lift investment portfolio balances while client utilization of our range of lending products continued to expand. Asset management and administration fees were up 12% year-over-year due to rising balances in advisory solutions, as well as proprietary and third-party mutual funds and ETFs. Including 19% growth in trading revenue driven by higher activity levels

SCHW in the fourth quarter of FY 21 has reported the adjusted earnings per share of 86 cents, missing the analysts’ estimates for the adjusted earnings per share of 88 cents, according to the Zacks Consensus Estimate. The company had reported the adjusted revenue growth of 13 percent to $4.71 billion in the fourth quarter of FY 21, missing the analysts’ estimates for revenue by 2.69%. Adjusted total expenses were up 7% year-over-year, reflecting robust client engagement and business growth, as well as the 5% employee salary increase that went into effect at the end of September. Strong revenue growth and disciplined expense management enabled the company to post a 43.0% pre-tax profit margin for the fourth quarter, 48.4% on an adjusted basis, and helped the full-year margins reach 41.6% and 47.5%, respectively.

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