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Non-Tech : Charles Schwab (SCH) -- A tech-stock profile? -- Ignore unavailable to you. Want to Upgrade?

To: regine who wrote (962)	10/14/1999 1:48:00 PM
From: Maverick	Read Replies (1) \| Respond to of 1390

attracted $24.6 billion in new customer funds; total ~ $600B Thursday October 14 12:13 PM ET Schwab Profit Rises But Client Trades Slow By Jack Reerink NEW YORK (Reuters) - Charles Schwab Corp (NYSE:SCH - news)., the No. 1 U.S. discount and Internet brokerage, Thursday said its third quarter profit rose 27 percent from a year ago, but it processed fewer stock trades than earlier this year due to unsettled financial markets. Schwab, the San Francisco-based broker with 6.3 million customers, earned $124.5 million, or 15 cents per diluted share, matching forecasts. That compared with $97.8 million, or 12 cents a share, in last year's third quarter, when financial market turmoil battered profits at most U.S. brokerages. Schwab's stock price gained 13/16 to 28-13/16 at midday on the New York Stock Exchange. The stock had fallen 3-5/8, or 11 percent, ahead of the results Wednesday, and is down almost two-thirds from its 77-7/16 high set in April. The latest results marked a decline from Schwab's record first half results. The reason is that the brokerage processed fewer trades and opened fewer accounts in the third quarter than in the first two quarters of the year. Year-over-year, however, Schwab showed gains in these two key gauges for measuring an Internet brokerage's results. ``Over the past three months, concerns about the interest-rate environment led to lower trading volumes and weaker returns in securities markets,' said Chairman Charles Schwab, in a statement. Schwab processed 175,400 trades a day in the third quarter, up from 141,900 a day a year ago but down from the 200,000-plus it recorded in the first two quarters of this year. The brokerage opened 282,000 new accounts in the third quarter, slightly up from 278,400 a year ago but down sharply from the 421,900 new accounts Schwab attracted in the record second quarter. After years of tremendous growth, the online brokerage industry is facing slowing trading volumes and new account growth this quarter because of unsettled markets and more competition. To counter this trend, online brokers are expected to spend $1 billion-plus in advertising the next year to sign up more customers. Schwab rival E-Trade Group Inc., the No. 2 U.S. Web broker, Wednesday reported only a slight drop in trading volumes and account growth in its latest quarter. E-Trade's growth, though, comes at a cost: heavy advertising spending has put the Menlo Park, Calif.-broker into the red. But analyst Michael Freudenstein of J.P. Morgan did not worry about Schwab's slower account growth but instead focused on the brokerage's ability to attract new customer money at a faster pace than its rivals. ``The results are exactly what distinguishes Schwab from its competitors; volumes can slow but customer assets continue to flow into the door,' Freudenstein said. ``They are a Hoover vacuum when it comes to taking in new assets.' Schwab said it attracted $24.6 billion in new customer funds in the third quarter, bringing the total to $595 billion. Customers had put a net $21.6 billion into their accounts in Schwab's second quarter. Schwab's commission income rose to $383.8 million in the quarter, up from $377 million a year ago but down from $464.2 million in the second quarter. The company averaged a commission of $44.72 per trade in the quarter, down from $52.83 a year ago because it processes more trades through its Web site at $29.95 an order. Schwab's mutual fund revenues, fees money managers pay Schwab when the broker's customers put money into their funds, rose to a record $192.9 million in the quarter, up from $144 million a year ago.