LPL Financial’s (LPLA - Free Report) second-quarter 2023 adjusted earnings of $3.94 per share handily surpassed the Zacks Consensus Estimate of $3.87. The bottom line reflects a jump of 76% from the prior-year quarter.
Results benefited from robust improvement in revenues, partly offset by an increase in expenses. LPLA recorded growth in brokerage and advisory assets, which acted as a tailwind.
After considering certain non-recurring charges, net income was $285.5 million or $3.65 per share, up from $160.5 million or $1.97 per share in the prior-year quarter. Our estimate for net income was $287.8 million.
Revenues Improve, Expenses Rise
Total net revenues of $2.47 billion grew 21% year over year. The top line also surpassed the Zacks Consensus Estimate of $2.40 billion.
Total expenses increased 14% year over year to $2.08 billion. The rise was due to an increase in almost all cost components except for other expenses. Our estimate for total expenses was $2.02 billion.
As of Jun 30, 2023, LPL Financial’s total brokerage and advisory assets were $1,240.2 billion, up 16% year over year.
In the reported quarter, total net new assets were $21.7 billion, down from $37.2 billion in the prior-year quarter. Total client cash balances declined 28% year over year to $50 billion.
Balance Sheet Position Solid
As of Jun 30, 2023, total assets were $9.4 billion, up 2% on a sequential basis. As of the same date, cash and cash equivalents totaled $761.2 million, up 62%.
Total stockholders’ equity was $2.1 billion as of Jun 30, 2023, down 3% sequentially.
Share Repurchase Update
In the reported quarter, the company repurchased shares worth $350 million.
Our View
LPL Financial’s recruiting efforts and solid advisor productivity will likely continue aiding advisory revenues. Strategic buyouts will keep supporting financials. However, mounting expenses and a deteriorating operating backdrop remain major near-term concerns for the company.
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
Interactive Brokers Group’s (IBKR - Free Report) second-quarter 2023 adjusted earnings per share of $1.32 missed the Zacks Consensus Estimate of $1.41. However, the bottom line reflects a rise of 57.1% from the prior-year quarter.
IBKR’s results were adversely impacted by an increase in expenses. A fall in daily average revenue trades was another headwind. However, an improvement in revenues was a positive.
Charles Schwab’s (SCHW - Free Report) second-quarter 2023 adjusted earnings of 75 cents per share beat the Zacks Consensus Estimate of 73 cents. The bottom line, however, declined 25% from the prior-year quarter.
SCHW’s results benefited from the solid performance of the asset management business. Also, the absence of fee waivers and solid brokerage account numbers acted as tailwinds during the quarter. However, a fall in revenues due to higher funding costs, lower volatility and softer investor sentiments posed a major headwind for SCHW.
7 Best Stocks for the Next 30 Days
Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."
Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.2% per year. So be sure to give these hand picked 7 your immediate attention.
See them now >>
LPL Financial’s (LPLA - Free Report) second-quarter 2023 adjusted earnings of $3.94 per share handily surpassed the Zacks Consensus Estimate of $3.87. The bottom line reflects a jump of 76% from the prior-year quarter.
Results benefited from robust improvement in revenues, partly offset by an increase in expenses. LPLA recorded growth in brokerage and advisory assets, which acted as a tailwind.
After considering certain non-recurring charges, net income was $285.5 million or $3.65 per share, up from $160.5 million or $1.97 per share in the prior-year quarter. Our estimate for net income was $287.8 million.
Revenues Improve, Expenses Rise
Total net revenues of $2.47 billion grew 21% year over year. The top line also surpassed the Zacks Consensus Estimate of $2.40 billion.
Total expenses increased 14% year over year to $2.08 billion. The rise was due to an increase in almost all cost components except for other expenses. Our estimate for total expenses was $2.02 billion.
As of Jun 30, 2023, LPL Financial’s total brokerage and advisory assets were $1,240.2 billion, up 16% year over year.
In the reported quarter, total net new assets were $21.7 billion, down from $37.2 billion in the prior-year quarter. Total client cash balances declined 28% year over year to $50 billion.
Balance Sheet Position Solid
As of Jun 30, 2023, total assets were $9.4 billion, up 2% on a sequential basis. As of the same date, cash and cash equivalents totaled $761.2 million, up 62%.
Total stockholders’ equity was $2.1 billion as of Jun 30, 2023, down 3% sequentially.
Share Repurchase Update
In the reported quarter, the company repurchased shares worth $350 million.
Our View
LPL Financial’s recruiting efforts and solid advisor productivity will likely continue aiding advisory revenues. Strategic buyouts will keep supporting financials. However, mounting expenses and a deteriorating operating backdrop remain major near-term concerns for the company.
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
Interactive Brokers Group’s (IBKR - Free Report) second-quarter 2023 adjusted earnings per share of $1.32 missed the Zacks Consensus Estimate of $1.41. However, the bottom line reflects a rise of 57.1% from the prior-year quarter.
IBKR’s results were adversely impacted by an increase in expenses. A fall in daily average revenue trades was another headwind. However, an improvement in revenues was a positive.
Charles Schwab’s (SCHW - Free Report) second-quarter 2023 adjusted earnings of 75 cents per share beat the Zacks Consensus Estimate of 73 cents. The bottom line, however, declined 25% from the prior-year quarter.
SCHW’s results benefited from the solid performance of the asset management business. Also, the absence of fee waivers and solid brokerage account numbers acted as tailwinds during the quarter. However, a fall in revenues due to higher funding costs, lower volatility and softer investor sentiments posed a major headwind for SCHW.
7 Best Stocks for the Next 30 Days
Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."
Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.2% per year. So be sure to give these hand picked 7 your immediate attention.
See them now >>
Get the latest research report on SCHW - FREE
Get the latest research report on IBKR - FREE
Get the latest research report on LPLA - FREE