Charles Schwab (SCHW, Financial) reported better-than-expected financial results for the third quarter, highlighting its strategic debt reduction. The company's adjusted earnings per share came in at $0.77, surpassing the analyst forecast of $0.75. Net revenue stood at $4.85 billion, higher than the anticipated $4.79 billion, while net interest income reached $2.22 billion, exceeding expectations of $2.0 billion.
The company saw a $9 billion quarterly increase in client trading cash balances, which facilitated a reduction of $8.9 billion in its supplemental bank funding. Schwab executives noted that the Federal Reserve's substantial interest rate hikes had adversely impacted their business as clients sought higher yield options, but the worst of this impact has passed.
CEO Walt Bettinger reported third-quarter net asset growth of over $95 billion, pushing year-to-date core net new assets to $252 billion, marking a 10% increase compared to the same period in 2023. Earlier this month, Schwab named Rick Wurster as its next CEO, succeeding Bettinger, who is set to retire at the end of the year. This leadership transition follows other executive changes, including Mike Verdeschi assuming the role of CFO on October 1, replacing Peter Crawford, who will assist during the transition.
Following the earnings report, Charles Schwab's stock saw an increase of approximately 8% during pre-market trading on Tuesday.
