Schwab Posts Decent Quarter Despite Retail Investor Fear

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

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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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