Onesource Is Source Of Schwab’s Financial Success
Charles Schwab Corp. said its third-quarter earnings rose 21 percent, boosted by growth in mutual fund revenue.
The largest U.S. discount broker said net income for the quarter ended Sept. 30 rose to $57.1 million, or 32 cents a share, from $47.2 million, or 26 cents, in the same period last year.
That exceeded analysts’ expectations of 29 cents a share, according to six analysts surveyed by IBES International Inc.
Schwab shares rose $1.37-1/2, or 5.6 percent, to $24.37-1/2.
“OneSource continues to be the thing that is moving them the most,” said Richard Strauss, a Goldman Sachs Group LP analyst. “Margins are continuing to hold up despite the new people coming into the (mutual fund supermarket) business like Merrill Lynch and Smith Barney.”
OneSource is a no-load mutual fund supermarket, through which investors can buy mutual funds from a variety of fund companies. The program was the first of its kind, and has spawned many imitators in the four years since Schwab started it.
The San Francisco-based firm’s revenue after interest income and interest expense rose 12 percent to $430.0 million from $385.5 million in the year earlier period.
Mutual fund service revenue, by contrast, increased 37 percent to $80.3 million from $58.8 million a year ago. Assets in Schwab’s OneSource rose 66 percent to $36.1 billion from a year ago.
Some of the stocks that moved substantially or traded heavily Friday.
NYSE
Sabre Group Holdings, up at $31.62-1/2 from initial offering at $27.
The new stock began trading after the computerized reservation system of American Airlines sold 20.2 million shares for $545 million, or $27 each, in an initial public offering of stock. The Fort Worth, Texas-based company had expected to sell the shares for $20 to $23 each.
Neiman Marcus Group, down $1.62-1/2 to $33.87-1/2.
The Chestnut Hill, Mass.-based retailer began a public offering of 8 million common shares at $35 a share. Neiman Marcus said it will use the proceeds to partially fund the planned repurchase of all of its outstanding preferred stock for about $416 million from Harcourt General Inc.
PepsiCo, up 25 cents to $29.
The food and beverage giant on Thursday named John F. Antioco, a veteran convenience store executive, to take charge of its struggling Taco Bell restaurants. Antioco previously held top positions at the companies that ran the 7-Eleven and Circle K convenience store chains.
Paracelsus Healthcare, down $5.62-1/2 at $4.50.
The Houston-based operator of acute-care hospitals expects to post a wider third-quarter loss than anticipated and hired a law firm to probe its financial reporting practices.
Seagate Technology, up $3.12-1/2 to $67.50.
The disk-drive maker said late Thursday it earned $1.06 a diluted share in its fiscal first quarter ended Sept. 27, beating estimates.
NASDAQ
Cascade Communications, down $15.12-1/2 to $71.37-1/2.
The Westford, Mass.-based switching-products maker reported third-quarter earnings that tripled its results in the same period a year ago but failed Wall Street expectations.
MDL Information, down $14.75 at $15.50.
The San Leandro, Calif.-based maker of chemical information management software expects its second-quarter earnings to fall far below forecasts. MDL said late Thursday its earnings were disappointing because two substantial orders in Europe failed to close as expected.
Ascend Communications, up $1 to $65.37-1/2.
The Alameda, Calif.-based manufacturer of digital network access products reported third-quarter operating results that exceeded Wall Street expectations.