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Schwab reports strong 4th-quarter profit

Discount broker Charles Schwab Corp. ended 2003 with its highest quarterly profit since the stock market peaked in early 2000, providing the latest sign of an investment revival on Main Street.
/ Source: The Associated Press

Discount broker Charles Schwab Corp. ended 2003 with its highest quarterly profit since the stock market peaked in early 2000, providing the latest sign of an investment revival on Main Street.

The San Francisco-based company said Thursday that it earned $148 million, or 11 cents per share, in the fourth quarter, reversing a loss of $79 million, or 6 cents per share, during the same 2002 period.

Revenue for the quarter totaled $1.12 billion, a 13 percent improvement from $986 million in the prior year.

The earnings matched the mean estimate among analysts polled by Thomson First Call.

Schwab's shares dipped 50 cents, more than 3 percent, to $13.25 in Thursday morning trading on the New York Stock Exchange.

The quarterly results marked Schwab's most profitable three-month period since the first quarter of 2000, when the company earned $284 million. The nation's best-known stock market indexes all reached record highs during that quarter before falling into a deep funk that was aggravated by job cuts, terrorist attacks, corporate scandals and uncertainties about the Iraq war.

The slump devastated most securities firms, including Schwab, which had expanded rapidly during the dot-com boom to accommodate millions of investors eager to buy and sell fast-rising high-tech stocks over the Internet.

Since the crash, Schwab has laid off 10,000 employees, or more than one-third of its work force.

But Schwab, like many of its rivals, has been bouncing back as the stock market has recovered during the past 10 months.

The company's revenue has improved for three consecutive quarters, largely reflecting the desire of its customers to swap stocks again.

Schwab's daily revenue-generating trades averaged 168,000 in December, the highest volume for any month since September 2001. Activity has been even more brisk so far this month, with the daily average rising to 221,000 during the first 12 trading days of the new year.

For all of 2003, Schwab earned $472 million, or 35 cents per share, on revenue of $4.1 billion. In 2002, the company earned $109 million, or 8 cents per share, on revenue of $4.1 billion.