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LPL Financial’s (LPLA - Free Report) third-quarter 2021 adjusted earnings of $1.77 per share surpassed the Zacks Consensus Estimate of $1.73. The bottom line reflects a rise of 23% from the prior-year quarter.
Results benefited from an improvement in revenues, partly offset by higher expenses. Further, the company’s balance sheet position remained strong.
After taking into consideration the amortization of intangible assets and acquisition costs, net income was $103.1 million or $1.26 per share, down from $103.8 million or $1.29 per share in the year-ago quarter.
Revenues Improve, Expenses Rise
Total net revenues were $2.02 billion, jumping 38% year over year. An increase in all components of revenues, except for other revenues, drove the rise.
Total operating expenses increased 43% to $1.86 billion. All expense components increased during the quarter.
As of Sep 30, 2021, LPL Financial’s total brokerage and advisory assets were $1,132.6 billion, surging 40% year over year.
Total net new assets were $29 billion at the end of the quarter, up from $11.1 billion at the end of the prior-year quarter. Total client cash balances grew 9% to $50.7 billion.
Strong Balance Sheet Position
As of Sep 30, 2021, total assets were $7.56 billion, up 5% sequentially. As of the same date, cash and cash equivalents totaled $977.8 million, up 8%.
Total stockholders’ equity was $1.62 billion as of Sep 30, 2021, up from $1.55 billion recorded at the end of the prior quarter.
Our View
LPL Financial’s recruiting efforts and solid advisor productivity will likely continue aiding advisory revenues. Strategic buyouts, including the acquisition of Waddell & Reed's wealth management business, will keep supporting financials. However, persistently mounting expenses are expected to hurt the company’s bottom line.
LPL Financial Holdings Inc. Price, Consensus and EPS Surprise
Charles Schwab’s (SCHW - Free Report) third-quarter 2021 adjusted earnings of 84 cents per share surpassed the Zacks Consensus Estimate of 80 cents. The bottom line jumped 65% from the prior-year quarter.
Interactive Brokers Group’s (IBKR - Free Report) third-quarter 2021 adjusted earnings per share of 78 cents surpassed the Zacks Consensus Estimate of 75 cents. The bottom line reflects growth of 47.2% from the prior-year quarter.
Raymond James’ (RJF - Free Report) fourth-quarter fiscal 2021 (ended Sep 30) adjusted earnings of $2.06 per share easily outpaced the Zacks Consensus Estimate of $1.75. The bottom line was up 73% from the prior-year quarter.
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LPL Financial (LPLA) Q3 Earnings Beat, Revenues Increase Y/Y
LPL Financial’s (LPLA - Free Report) third-quarter 2021 adjusted earnings of $1.77 per share surpassed the Zacks Consensus Estimate of $1.73. The bottom line reflects a rise of 23% from the prior-year quarter.
Results benefited from an improvement in revenues, partly offset by higher expenses. Further, the company’s balance sheet position remained strong.
After taking into consideration the amortization of intangible assets and acquisition costs, net income was $103.1 million or $1.26 per share, down from $103.8 million or $1.29 per share in the year-ago quarter.
Revenues Improve, Expenses Rise
Total net revenues were $2.02 billion, jumping 38% year over year. An increase in all components of revenues, except for other revenues, drove the rise.
Total operating expenses increased 43% to $1.86 billion. All expense components increased during the quarter.
As of Sep 30, 2021, LPL Financial’s total brokerage and advisory assets were $1,132.6 billion, surging 40% year over year.
Total net new assets were $29 billion at the end of the quarter, up from $11.1 billion at the end of the prior-year quarter. Total client cash balances grew 9% to $50.7 billion.
Strong Balance Sheet Position
As of Sep 30, 2021, total assets were $7.56 billion, up 5% sequentially. As of the same date, cash and cash equivalents totaled $977.8 million, up 8%.
Total stockholders’ equity was $1.62 billion as of Sep 30, 2021, up from $1.55 billion recorded at the end of the prior quarter.
Our View
LPL Financial’s recruiting efforts and solid advisor productivity will likely continue aiding advisory revenues. Strategic buyouts, including the acquisition of Waddell & Reed's wealth management business, will keep supporting financials. However, persistently mounting expenses are expected to hurt the company’s bottom line.
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 Brokerage Firms
Charles Schwab’s (SCHW - Free Report) third-quarter 2021 adjusted earnings of 84 cents per share surpassed the Zacks Consensus Estimate of 80 cents. The bottom line jumped 65% from the prior-year quarter.
Interactive Brokers Group’s (IBKR - Free Report) third-quarter 2021 adjusted earnings per share of 78 cents surpassed the Zacks Consensus Estimate of 75 cents. The bottom line reflects growth of 47.2% from the prior-year quarter.
Raymond James’ (RJF - Free Report) fourth-quarter fiscal 2021 (ended Sep 30) adjusted earnings of $2.06 per share easily outpaced the Zacks Consensus Estimate of $1.75. The bottom line was up 73% from the prior-year quarter.