Charles Schwab Corp. said Thursday its first-quarter profit dropped 45 percent as fee and trading revenue fell.
Schwab has been locked in competition with other online brokerage firms for new clients. That competition has led Schwab and others to cut commission costs, which eat into revenue.
Its shares fell 21 cents to $19.14 in morning trading.
The San Francisco-based online brokerage and investment management company cut its commission for online equity and non-Schwab exchange-traded fund trades to a flat price of $8.95. Trade revenue as Schwab fell 19 percent in the first quarter, compared with the year-ago period.
The drop in revenue led to a decline in earnings. Schwab earned $119 million, or 10 cents per share, during the quarter ended March 31, down from $218 million, or 19 cents per share, a year ago.
Schwab's revenue fell 12 percent from the year-ago quarter to $978 million. Trading revenue fell to $209 million, while fees from asset management and administration fell 16 percent to $420 million.
Analysts polled by Thomson Reuters, on average, forecast Schwab would earn 11 cents per share during the quarter on total revenue of $982.1 million.
The move to cut fees for online equity trades helped Schwab grow its customer accounts during the quarter. Net new accounts for the first quarter totaled about 52,000, a 20 percent jump from the first quarter last year. Schwab had about 5.4 million accounts as of March 31, which is 3 percent more than it did at the same time last year.
Client assets have risen sharply over the past year as markets rebounded. Total client assets have risen 36 percent in the past year. Client assets totaled $1.491 trillion as the end of the first quarter.
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