Schwab Posts Decent Quarter Despite Retail Investor Fear


The May plunge was pretty scary, but several stock market indices continue to post solid results this year. The Nasdaq 100 is up 13.8% YTD, the S&P 500 is up by 8.4%. Yet, if the Q2 performance by Schwab and TD Ameritrade are any indication, retail investors remain cautious.

Brad Hints of Bernstein Research writes this morning:

Schwab reported operating EPS of $0.17 for Q2'12, a penny below our estimate andBrad Hintz' notes on Schwab's performance:

Schwab: Solid Q2'12 Results Despite Retail Investor Headwinds

  • Schwab reported operating EPS of $0.17 for Q2'12, a penny below our estimate and consensus.
  • Pre-tax margin excluding a one-time gain was 28.2%, up from 26.3% last quarter but below the 32.4% figure achieved in Q2'11 and the firm's 2012 guidance of 30%. Month-to-date volumes are tracking lower.
  • We adjust our 2012 EPS estimate up to $0.67 from $0.65 reflecting progress cutting expenses, but we remain below consensus ($0.69). We also increase our 2013 estimate by $0.02 to $0.81. We rate SCHW market-perform with a $15 price target.

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What's Von Aldo?

REP. Editor-in-Chief David Aldo Geracioti on the business of Wall Street from a free-market perspective.


David Aldo Geracioti

Is the editor-in-chief of REP. magazine.  He is also a devotee of the Austrian School of Economics leading lights Ludwig von Mises, Friedrich von Hayek, Murry Rothbard and to other thinkers in...
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