SAN FRANCISCO — Charles Schwab Corp.'s quarterly profit surged to its highest level in six years as the stock brokerage continued to win over customers with lower prices and an advertising campaign highlighting the Main Street appeal of the company's namesake founder.
The San Francisco-based company said Monday that it earned $243 million, or 19 cents per share, for the three months ending in March. That represented a 68 percent increase from net income of $145 million, or 11 cents per share, for the same period last year.
Revenue totaled $1.28 billion, a 21 percent increase from $1.06 billion last year.
The earnings matched the average estimate among analysts surveyed by Thomson Financial.
It marked the second-highest quarterly profit in Schwab's 31-year history, ranking behind net income of $284 million during the first three months of 2000 when the brokerage was still reveling in the stock market giddiness of the dot-com boom.
Schwab's shares fell 25 cents, or 1.4 percent, to close at $17.34 on the Nasdaq Stock Market.
The company's stock price has more than doubled since founder Charles Schwab returned as chief executive in July 2004, determined to revive a business mired in a deep slump that had triggered more than 10,000 layoffs in four years. With Schwab back in control, the brokerage returned to its discounting roots by lowering its prices to become more competitive with more nimble Internet upstarts that had been luring away some of its customers.
Although the price-cutting required relinquishing revenue in the short term, Schwab figured the sacrifice would pay off in the long run by spurring customers to trade more frequently.
The strategy bore fruit in the first quarter.
Schwab averaged 275,200 revenue-producing daily trades during the period, a 44 percent increase from an average of 191,300 daily trades at the same time last year. The brokerage's commission averaged $13.39 per trade during the quarter, a 25 percent decrease from $17.95 per trade last year.
Over the past year, the company also has sought to capitalize on its founder's populist appeal by running "Talk To Chuck" ads that positioned the brokerage as the best place for straightforward investment advice.
That effort also appears to be paying off. Schwab picked up 188,000 new brokerage accounts in the first quarter, a 25 percent improvement from last year. Excluding market gains, Schwab's customer assets grew by $28.1 billion in the quarter, a 75 percent increase from $16.1 billion last year.