Charles Schwab Corp., national discount and online brokerage, issued its second quarter profit warning yesterday, saying its second quarter profit is likely to fall short of analysts' expectations due to declines in trading volume.
The San Francisco-based firm said average daily commission trades hit a 19-month low of 166,300 in May, down 16 percent from the same period last year and down six percent from April. The company added that the first eight days of this month reflected a more rapidly decreasing decline of 21 percent below May's level.
Analysts had been expecting Schwab to earn roughly $.08 to $.11 per share in the second quarter. The company said that unless trading volumes significantly jump over the next two to three weeks, it should not reach those expectations.
Schwab said it opened 75,600 new accounts in May, down 29 percent form a year earlier and 38 percent lower than the 121,000 new accounts opened in April
The company has been reducing its workforce by roughly 200 employees per month, representing a 14 percent reduction since the beginning of the year. The staff totaled 22,600 at the end of May.
Schwab's stock ended down 7.6 percent to $16.03 at the close of trading yesterday on the New York Stock Exchange, dangerously close to its 52-week low on April 4.