Salomon Smith Barney is keeping its underperform rating on Charles Schwab (SCH ).
Analyst Guy Moszkowski says the company's seven cents operating earnings per share fell below the eight cents consensus and his nine cents estimate, which he raised from eight cents after a favorable trading report in November. Moszkowski notes the main reason for the shortfall: December trading activity failed to live up to November's promise, while the company still felt the need to set aside a meaningful bonus pool.
Also, he notes marketing spending exceeded his estimates, although the payoff was at least solid in terms of net inflows of client assets. Moszkowski maintains his 42 cents 2003 earnings per share estimate, which he believes already factors into earnings recovery prospects going forward.