News
LPL Financial (LPLA) Second-Quarter Earnings Beat Higher Revenue
LPL FinancialLPLA’s second-quarter 2024 adjusted earnings of $3.88 per share easily surpassed the Zacks Consensus Estimate of $3.66. The bottom line, however, reflects a 2% decline from the prior year.
Results benefited from a robust improvement in revenues, partially offset by an increase in expenses. LPLA recorded growth in brokerage and advisory assets, which acted as a tailwind.
After considering certain non-recurring items, net income was $243.8 million, or $3.23 per share, down from $285.5 million, or $3.65 per share, in the year-ago quarter. Our estimate for net income was $248.1 million.
Revenues improve, expenses increase
Total net revenue of $2.93 billion grew 19% year over year. The top line surpassed the Zacks Consensus Estimate of $2.83 billion.
Total expenses jumped 25% year over year to $2.60 billion. The increase was due to an increase in nearly all cost components except for communications and data processing costs. Our estimate for total expenses was $2.43 billion.
As of June 30, 2024, LPL Financial’s total brokerage and advisory assets were $1,497.8 billion, an increase of 21% from the prior year.
In the reported quarter, total net new assets were $34 billion, up from $21.7 billion in the year-ago quarter.
Total customer cash balances fell 11% from a year earlier to $44 billion.
Solid balance sheet position
As of June 30, 2024, total assets were $11.5 billion, an increase of 4% on a sequential basis. As of the same date, cash and cash equivalents totaled $1.3 billion, an increase from $1.1 billion at the end of the previous quarter.
Total equity was $2.5 billion as of June 30, 2024, an increase of 11% sequentially.
Share Buyback Update
In the reported quarter, the company did not repurchase any shares.
Our vision
LPL Financial’s recruiting efforts and strong advisor productivity will likely continue to support advisory revenues. Strategic acquisitions will continue to support financials.
However, rising expenses and a difficult operating environment are the main short-term concerns for the company.
LPL Financial Holdings Inc. Price, Consensus and EPS Surprise
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.
Performance of other brokers
Charles SchwabSCHW’s second-quarter 2024 adjusted earnings of 73 cents per share met the Zacks Consensus Estimate. The bottom line, however, fell 3% from the year-ago quarter.
SCHW’s results benefited from solid performance in its asset management business, which boosted revenue. The absence of fee waivers and solid brokerage account numbers acted as tailwinds. However, higher funding costs represented a major headwind. Schwab also reported an increase in adjusted expenses.
Interactive Brokers GroupIBKR’s second-quarter 2024 adjusted earnings per share of $1.76 surpassed the Zacks Consensus Estimate of $1.69. Furthermore, the bottom line reflects an increase of 33.3% from the prior-year quarter.
Notably, in the reported quarter, IBKR recognized a $48 million loss on positions taken as client accommodation due to a technical issue at the NYSE on June 3, 2024.
IBKR’s results were primarily aided by an increase in revenues. The company reported growth in client accounts during the quarter, which, along with an increase in average daily revenue trades, was another tailwind. However, marginally higher expenses hurt the results to some extent.
The story continues
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LPL Financial Holdings Inc. (LPLA): Free Stock Analysis Report