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LPL Financial Stock Jumps 6.9% as Q3 Earnings Beat on Higher Revenues
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Shares of LPL Financial (LPLA - Free Report) have gained 6.9% since the release of better-than-expected third-quarter 2024 results on Oct. 30 after market close. Adjusted earnings of $4.16 per share handily outpaced the Zacks Consensus Estimate of $3.69. The bottom line also reflects year-over-year growth of 11%.
Stay up-to-date with all quarterly releases: See ZacksEarnings Calendar.
Results benefited from robust improvement in revenues, partly offset by higher expenses. LPLA recorded growth in brokerage and advisory assets, which acted as a tailwind.
After considering certain non-recurring items, net income was $255.3 million or $3.39 per share, up from $224.3 million or $2.91 per share in the prior-year quarter. Our estimate for net income was $229.9 million.
LPLA’s Revenues Improve, Expenses Rise
Total net revenues of $3.11 billion surged 23% year over year. The top line beat the Zacks Consensus Estimate of $3.01 billion.
Total expenses jumped 25% to $2.76 billion. The rise was due to an increase in all cost components, except for communications and data processing costs. Our estimate for total expenses was $2.64 billion.
As of Sept. 30, 2024, LPL Financial’s total brokerage and advisory assets were $1,592.1 billion, up 29%. In the reported quarter, total net new assets were $27.5 billion, down from $33.2 billion in the prior-year quarter.
Total client cash balances declined 2% year over year to $45.8 billion.
LPLA’s Balance Sheet Position Solid
As of Sept. 30, 2024, total assets were $11.94 billion, up 4% on a sequential basis. As of the same date, cash and cash equivalents totaled $1.47 billion, up from $1.32 billion.
Total stockholders’ equity was $2.77 billion as of Sept. 30, 2024, up 10% sequentially.
Update on LPL Financial’s Share Repurchases
In the reported quarter, the company did not repurchase any shares.
The company intends to start share repurchases in the fourth quarter of 2024, with almost $100 million of buybacks planned during the quarter.
Our View on LPL Financial
LPL Financial’s recruiting efforts and solid advisor productivity will likely continue aiding advisory revenues. Strategic acquisitions will keep supporting financials. However, mounting expenses and a tough operating backdrop are major near-term concerns for the company.
LPL Financial Holdings Inc. Price, Consensus and EPS Surprise
Charles Schwab’s (SCHW - Free Report) third-quarter 2024 adjusted earnings of 77 cents per share beat the Zacks Consensus Estimate. The bottom line, however, was stable year over year.
Results benefited from the solid performance of the asset management business, which drove revenues. The absence of fee waivers and solid brokerage account numbers acted as tailwinds during the quarter. However, higher funding costs posed a major headwind. SCHW also recorded a rise in adjusted expenses.
Interactive Brokers Group’s (IBKR - Free Report) third-quarter 2024 adjusted earnings per share of $1.75 reflects a rise of 12.9% from the prior-year quarter’s actual. The Zacks Consensus Estimate for the metric was $1.78.
IBKR’s results primarily benefited from an increase in revenues. The company recorded growth in customer accounts in the quarter, which, along with a rise in daily average revenue trades, was a tailwind. However, higher expenses hurt the results to some extent.
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LPL Financial Stock Jumps 6.9% as Q3 Earnings Beat on Higher Revenues
Shares of LPL Financial (LPLA - Free Report) have gained 6.9% since the release of better-than-expected third-quarter 2024 results on Oct. 30 after market close. Adjusted earnings of $4.16 per share handily outpaced the Zacks Consensus Estimate of $3.69. The bottom line also reflects year-over-year growth of 11%.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Results benefited from robust improvement in revenues, partly offset by higher expenses. LPLA recorded growth in brokerage and advisory assets, which acted as a tailwind.
After considering certain non-recurring items, net income was $255.3 million or $3.39 per share, up from $224.3 million or $2.91 per share in the prior-year quarter. Our estimate for net income was $229.9 million.
LPLA’s Revenues Improve, Expenses Rise
Total net revenues of $3.11 billion surged 23% year over year. The top line beat the Zacks Consensus Estimate of $3.01 billion.
Total expenses jumped 25% to $2.76 billion. The rise was due to an increase in all cost components, except for communications and data processing costs. Our estimate for total expenses was $2.64 billion.
As of Sept. 30, 2024, LPL Financial’s total brokerage and advisory assets were $1,592.1 billion, up 29%. In the reported quarter, total net new assets were $27.5 billion, down from $33.2 billion in the prior-year quarter.
Total client cash balances declined 2% year over year to $45.8 billion.
LPLA’s Balance Sheet Position Solid
As of Sept. 30, 2024, total assets were $11.94 billion, up 4% on a sequential basis. As of the same date, cash and cash equivalents totaled $1.47 billion, up from $1.32 billion.
Total stockholders’ equity was $2.77 billion as of Sept. 30, 2024, up 10% sequentially.
Update on LPL Financial’s Share Repurchases
In the reported quarter, the company did not repurchase any shares.
The company intends to start share repurchases in the fourth quarter of 2024, with almost $100 million of buybacks planned during the quarter.
Our View on LPL Financial
LPL Financial’s recruiting efforts and solid advisor productivity will likely continue aiding advisory revenues. Strategic acquisitions will keep supporting financials. However, mounting expenses and a tough operating backdrop are major near-term concerns for the company.
LPL Financial Holdings Inc. Price, Consensus and EPS Surprise
LPL Financial Holdings Inc. price-consensus-eps-surprise-chart | LPL Financial Holdings Inc. Quote
Currently, LPL Financial carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performances of LPLA’s Peers
Charles Schwab’s (SCHW - Free Report) third-quarter 2024 adjusted earnings of 77 cents per share beat the Zacks Consensus Estimate. The bottom line, however, was stable year over year.
Results benefited from the solid performance of the asset management business, which drove revenues. The absence of fee waivers and solid brokerage account numbers acted as tailwinds during the quarter. However, higher funding costs posed a major headwind. SCHW also recorded a rise in adjusted expenses.
Interactive Brokers Group’s (IBKR - Free Report) third-quarter 2024 adjusted earnings per share of $1.75 reflects a rise of 12.9% from the prior-year quarter’s actual. The Zacks Consensus Estimate for the metric was $1.78.
IBKR’s results primarily benefited from an increase in revenues. The company recorded growth in customer accounts in the quarter, which, along with a rise in daily average revenue trades, was a tailwind. However, higher expenses hurt the results to some extent.