Charles Schwab Slides as Record Quarter Lands Short on Revenue

Charles Schwab shares fell about 3% in early-afternoon trading on Thursday, even after the brokerage reported the most profitable quarter in its history. The stock changed hands near $94, down from Wednesday’s close of $96.80. Records were not the story. Investors fixed instead on a slim revenue shortfall and guidance that pointed to the lower end of the firm’s earlier targets.

Earnings beat, revenue a hair short

Schwab earned an adjusted $1.69 a share in the third quarter, up 29% from a year earlier and ahead of the $1.66 analysts had penciled in. Revenue rose 17% to $7.17 billion. That was the catch. The figure landed just under the $7.19 billion Wall Street expected, and after a long run of clean beats, a miss of any size drew the eye.

The business underneath kept compounding. Net interest revenue, the money Schwab earns on client cash, rose 14%. Trading revenue climbed 16% to $1.2 billion as client activity set records. The company said it drew in about $190 billion in core net new assets during the quarter, up 38% from a year earlier, and opened 1.24 million new brokerage accounts. Total client assets reached a record $13.3 trillion. The company reported a 25% return on equity and a pretax profit margin of 52.7%. It also said trading activity jumped 44% from a year earlier.

Guidance set the tone

Management framed the rest of the year more cautiously. Guidance did the rest. On its earnings call, the company said full-year revenue growth and net interest margin would land toward the lower end of the ranges it laid out over the summer. For a stock that had been priced for acceleration, steady did not clear the bar. The reaction tracked a familiar pattern this earnings season, in which strong results met investors who had already paid for them.

The drop extends a weak month

Thursday’s slide deepens a rough stretch. Schwab traded above $105 a month ago and has shed about 10% since. The shares now sit about 18% below their 52-week high of $114.53, though they remain well clear of the $65.88 low from earlier in the year. Volume ran heavy again. More than 9 million shares had changed hands by early afternoon, above the stock’s recent full-day average, following an elevated session on Wednesday.

The move also comes against a jumpy tape. Major indexes were mixed on Thursday as a multiday selloff in AI and chip names tried to steady, with money rotating toward health care and consumer staples. Financials were not the day’s main event, which left Schwab’s own numbers to carry the stock.

What to watch into the close

Whether the early selling holds or buyers step in, as they did across parts of the tech tape on Thursday, will set the closing print. The close will tell more. Past today, the detail behind the lower-end guidance matters more than the headline miss: how net interest margin trends as client cash shifts, and whether record new-account and asset growth keeps feeding future revenue. Schwab’s next quarterly results are due in January.

This is a general-market summary for information only — not investment advice, and not a recommendation regarding any security.