Shares of LPL Financial LPLA 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 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 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.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

The Charles Schwab Corporation (SCHW) : Free Stock Analysis Report

Interactive Brokers Group, Inc. (IBKR) : Free Stock Analysis Report

LPL Financial Holdings Inc. (LPLA) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research