High Market Volatility and Rates to Aid Schwab's Q1 Earnings

Core Viewpoint - Charles Schwab is expected to report strong year-over-year growth in earnings and revenues for the first quarter of 2025, with key factors contributing to this performance being solid trading revenues, net interest revenues, and asset management fees [1][12]. Group 1: Earnings and Revenue Expectations - The consensus estimate for Schwab's first-quarter earnings is 99 cents per share, reflecting a 33.8% increase from the previous year [12]. - The consensus estimate for sales is $5.49 billion, indicating a 15.8$922.9 million, driven by solid client activity amid market volatility and economic conditions [5][4]. - Net interest revenues are expected to grow by 17.1% year-over-year to $2.62 billion, supported by higher yields on interest-earning assets despite a slight decline in average interest-earning assets [7][6]. - Asset management and administration fees are anticipated to rise by 13.2$1.53 billion, bolstered by strong equity market performance and growth in client assets [8]. Group 3: Expense Outlook - Schwab's operating expenses are projected to increase by 5.9% year-over-year to $3.11 billion, influenced by regulatory spending, strategic acquisitions, and marketing efforts [9]. Group 4: Earnings Surprise History - Schwab has a strong earnings surprise history, having surpassed the Zacks Consensus Estimate in three of the last four quarters, with an average beat of 4.07% [3]. Group 5: Earnings ESP and Zacks Rank - The Earnings ESP for Schwab is +0.36%, and it currently holds a Zacks Rank of 3, indicating a favorable outlook for beating earnings estimates [11][10].