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LPL Financial (LPLA) Stock Up on Q1 Earnings & Revenue Beat

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Shares of LPL Financial Holdings Inc. (LPLA - Free Report) gained 6.3% since the release of first-quarter 2018 results last week. The company reported earnings per share of $1.01, which handily outpaced the Zacks Consensus Estimate of 69 cents. Further, it was 94% higher than the prior-year quarter figure. Results in both the quarters included certain non-recurring items.

Results benefited from increase in revenues and impressive asset growth. However, higher expenses remained the undermining factor.

Net income came in at $94 million, surging 94% year over year.

Revenues & Expenses Rise

Net revenues totaled $1.24 billion, up 20% on a year-over-year basis. Rise in all revenue components except other income (down 96%) supported top-line growth. Also, it surpassed the Zacks Consensus Estimate of $1.19 billion.

Operating expenses increased 20% year over year to $1.09 billion. All expense components, other than depreciation and amortization, witnessed a rise.

Non-operating interest expenses were $29.6 million, up 17% from the prior-year quarter.

As of Mar 31, 2018, brokerage and advisory assets summed $647.5 billion, up 22% year over year.

Share Repurchase Update

During the reported quarter, LPL Financial repurchased nearly 1 million shares for $61 million.

Our Take

LPL Financial has been expanding its offerings to all affiliated advisors in order to focus on high net-worth markets. We believe that such initiatives will help the company gain greater market share. However, mounting operating expenses remain a major near-term concern.

LPL Financial Holdings Inc. Price, Consensus and EPS Surprise

 

LPL Financial Holdings Inc. Price, Consensus and EPS Surprise | 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 Investment Brokers

Interactive Brokers Group’s (IBKR - Free Report) first-quarter 2018 earnings per share of 63 cents surpassed the Zacks Consensus Estimate of 56 cents. Also, the figure was higher than prior-year quarter’s figure of 34 cents per share.

E*TRADE Financial pulled off a positive earnings surprise of 11.4% in first-quarter 2018. Earnings of 80 cents per share surpassed the Zacks Consensus Estimate of 79 cents. Moreover, results compared favorably with 48 cents recorded in the prior-year quarter.

Charles Schwab’s (SCHW - Free Report) first-quarter 2018 earnings of 55 cents per share surpassed the Zacks Consensus Estimate by a penny. Also, earnings surged 41% from the prior-year quarter.

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