Charles Schwab Corp.'s fourth-quarter profit dropped 64 percent, reflecting the toll of the latest reorganization aimed at reinvigorating the long-slumping stock brokerage.
The San Francisco-based company said Tuesday that it earned $53 million, or 4 cents per share, during the three months ended in December. That contrasted with net income of $148 million, or 11 cents per share, during the same 2003 period.
Revenue for the period totaled $1.06 billion, unchanged from the prior year.
Schwab absorbed $111 million in restructuring charges during the quarter as the company continued to jettison workers to cuts costs so it can afford to lower its brokerage commissions and other fees.
If not for the fourth-quarter charges, Schwab said it would have earned 12 cents per share. That figure was a penny above the mean estimate among analysts surveyed by Thomson First Call.
Schwab has been struggling to recapture its stride for the past four years. The brokerage's woes began in late 2000 as customers rattled by a sharp decline in the stock market began to curtail their trading.
To offset a loss in revenue, Schwab tried to introduce more fees to pay for more sophisticated services — a shift that alienated many budget-minded customers who preferred the low-cost, self-service approach that helped the discount brokerage revolutionize the industry.
The company has been emphasizing a back-to-basics approach since its board ousted David Pottruck as its chief executive six months ago and brought back founder Charles Schwab to help win back customers.
Since Schwab's arrival, the brokerage has dramatically lowered its fees to become more competitive with online rivals such as E-Trade Financial Corp. and Ameritrade Holding Corp.
The strategy appears to be paying off. Schwab said customers deposited an additional $16.8 billion in their accounts during the fourth quarter. Excluding gains made through acquisitions, that was the highest quarterly customer inflow into Schwab in more than three years.