Schwab Reports Record 2005 Net Income of $725M
January 30, 2006
Charles Schwab reported that for the quarter ended Dec. 31, 2005, the company's net income was $187 million, which is impressive when compared to the $53 million for the fourth quarter of 2004. For the year ended Dec. 31, the company's net income was a whopping $725 million, compared with net income of $286 million in 2004.
"Throughout 2005, we have focused on restoring our value proposition, reconnecting with our clients and improving our financial performance," Chairman and CEO Charles Schwab said in a statement. "During the year, we completed a series of price reductions representing an investment in our clients of more than $375 million annually. We also made great progress in building stronger client relationships. In December alone, clients brought $9 billion in net new assets to the company, the seventh straight month of net new assets in excess of $6 billion."
Schwab also noted that net new assets in 2005 totaled $75 billion, a 49% increase from 2004, bringing total client assets to a record $1.199 trillion by year-end, up 11% from year-end 2004.
Schwab CFO Christopher Dodds also noted that the firm exceeded all of its primary financial objectives in 2005, which included mid single-digit percentage revenue growth and a pre-tax profit margin of at least 15%. In fact, Schwab achieved 6% revenue growth, a 26.5% pre-tax margin and earnings per share of $0.55, he said.
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