In continuation with its earnings streak,
LPL Financial Holdings Inc.
) fourth-quarter 2013 adjusted earnings per share of 63 cents
surpassed the Zacks Consensus Estimate of 55 cents. Further, this
was up 26.0% from 50 cents earned in the year-ago quarter.
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For full-year 2013, LPL Financial recorded earnings per share of
$2.44 versus $2.03 in 2012. Earnings for the year also beat the
Zacks Consensus Estimate of $2.29.
Results benefited from consistent growth in the top line and
steady share buybacks, which were partially offset by rising
expenses. In 2013, the weighted average share count declined 4.8%
to 103.4 million due to the regular buybacks. Consequently, this
contributed to a rise in earnings per share. Further, growth in
assets under custody was a tailwind for the quarter.
LPL financial reported adjusted earnings of $65.2 million, up
21.1% from $53.9 million in prior-year quarter. For full-year
2013, the figure was $258.8 million, up 15% from 2012.
Net revenue came in at $1.09 billion, up 15.9% year over year.
The top-line growth was primarily driven by rise in other
revenues as well as advisory and commission fee. Moreover, total
revenue beat the Zacks Consensus Estimate of $1.07 billion.
For 2013, total revenue came in at $4.1 billion, up 13.1% from
$3.7 billion in 2012. Moreover, total revenue surpassed the Zacks
Consensus Estimate of 4.0 billion.
Total expenses came in at $1.0 billion, up 16.9% on a
year-over-year basis. The increase was due to rise in all the
components of operating expense except for other expenses.
Non-operating expense, net of non-controlling interests, was
recorded at $13.3 million, up 5.8% from prior-year quarter.
Advisory assets under custody totaled $151.6 billion as of Dec
31, 2013, up 24.2% from the comparable year-ago period.
Capital Deployment Activity
In the reported quarter, LPL Financial repurchased 0.9 million
shares for $34.8 million. In full-year 2013, the company bought
back 5.8 million shares for $219.1 million.
Further, management has authorized an additional share repurchase
of $150 million, thereby increasing the existing share buyback
authorization to $218 million.
Along with the earnings release, the company announced a cash
dividend to 24 cents, which marked a hike of 26% from the prior
disbursement. The dividend will be paid on Mar 10 to stockholders
of record as of Feb 24.
Performance of Other Investment Brokers
Among other investment management firms, while
The Charles Schwab Corporation
) beat the Zacks Consensus Estimate aided by higher revenues,
Interactive Brokers Group, Inc.
) lagged the Zacks Consensus Estimate due to increased expenses.
E*TRADE Financial Corporation
) earnings came in line with the Zacks Consensus Estimate. Rise
in total daily average revenue trades, along with reduced
delinquencies, were positives for the quarter.
LPL Financial's sound capital deployment activities continue to
boost shareholders' confidence. Moreover improved advisory
activity will benefit the company in the long run. However,
rising expenses and a sluggish economic scenario remain causes of
LPL Financial currently carries a Zacks Rank #1 (Strong Buy).