Schwab posted net income of $97.8 million, or 35 cents per share, compared with net income of $76.5 million or 28 cents per share, for the like quarter a year ago. Wall Street was expecting the company to report profits of 33 cents a share, according to First Call.
As more investors go online, many electronic brokerages are refining their strategies for attracting and retaining customers. Schwab and competitor E*Trade have redesigned their Web sites recently and E*Trade has embarked on an expensive TV advertising campaign. Some analysts have said e-brokerages could profit from increased trading activity in light of the recent market downturn, but could see profits shrink if trading levels drop off.
Quarterly revenue rose to $705.2 million from $611.8 million last year.
"Harnessing the Internet to deliver a wide range of information and services is another important part of our full-service vision," Schwab president and cochief executive David Pottruck said in a statement.
About 2 million of Schwab's 5.5 million accounts are active online accounts, up from 1 million a year ago, executives said. Online transactions accounted for 54 percent of the company's total trades during the quarter ended September 30 compared with 39 percent a year ago.
More than 200 of Schwab's 279 branches have made Internet terminals available to customers with plans to have all Schwab's offices online by the end of the year, spokesman Tom Taggart said.
Many branches also host evening Internet training sessions for novice investors and less computer-savvy customers, he said.
Stock in the company was down nearly 3 percent in midday trading at 41.3125. Schwab reported its financial results before the stock markets opened today.