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Schwab 3Q halved
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October 16, 2001: 12:57 p.m. ET
Discount broker's profit slumps due to dwindling trading activity.
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NEW YORK (CNNmoney) - Charles Schwab Corp., the nation's largest discount stock broker, said Tuesday the slumping stock market and reduced trading activity cut its third-quarter profit in half compared with same period last year.
San Francisco-based Schwab posted a third-quarter profit of $81 million, or 6 cents a share, on revenue of $1 billion, down from $165 million, or 12 cents a share, on revenue of $1.3 billion a year earlier.
Analysts expected Charles Schwab (SCH: up $0.55 to $11.55, Research, Estimates) to earn 5 cents a share in the latest quarter, according to earnings tracker First Call.
"They beat estimates, which were lowered after the four-day break, but the high volatility when the markets reopened pretty much offset that," said Justin Hughes, analyst with Robertson Stephens. "The high volume probably won't continue and their quarter is pretty much what we expected."
Schwab warned Sept. 19 that the four-day market hiatus following the Sept. 11 attacks would reduce its third-quarter earnings by 1 cent a share. The company previously expected to earn 6 cents a share.
"The uncertainty surrounding the duration and severity of the current economic slowdown has only increased following the horrific events of Sept. 11," Chairman and CEO Charles Schwab said. "Even in an environment that included the weakest trading client activity since the fourth quarter of 1998, we were able to deliver credible financial performance in the third quarter."
Including a restructuring charge, Schwab earned $13 million, or 1 cent a share, in the quarter, and opened 184,000 new accounts, bringing its total number of active accounts to 7.8 million. 
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