LPL Financial Holdings’ earnings more than doubled in the third quarter of 2022, reaching $232 million or $2.86 per share, a whopping 127% increase year-over-year and 44% higher than in the preceding quarter. This compares with $103 million, or $1.26 per share, in the third quarter of 2021 and $161 million, or $1.97 per share, in the second quarter of 2022.
These results were part of the financial services giant’s earnings announcement for the quarter that ended September 30, 2022. For some analysts, they represented an earnings surprise of 10.21%.
The market has not been kind to asset values, of course, and that was also reflected in the results: Total advisory and brokerage assets decreased 8% year-over-year to $1.04 trillion. Advisory assets fell 9% year-over-year to $543 billion.
According to Michael Elliott, an analyst at CFRA Research, organic growth at the firm has remained strong because LPL was able to add assets. CFRA maintains a “hold” position on LPL shares.
“Organic growth remained strong as [LPL] added total net new assets of $19.9 billion, representing 7% organic growth,” Elliott wrote in a research note. “Recruiting remained a positive with 173 net new advisors added, bringing [LPL] to 21,044 total advisors.”
Over the past 12 months, organic net new assets grew 9% to $101 billion.
“We delivered another quarter of solid results,” declared LPL CFO Matt Audette, in a statement. He attributed the company’s success in part to a combination of staying disciplined on expenses, continued organic growth, and the successful integration of the retail brokerage and advisory business of People’s United Bank during the third quarter. (In the second quarter, LPL on-boarded CUNA Brokerage Services’ retail brokerage and advisory business.)
LPL has beaten consensus earnings-per-share estimates in each of the past four quarters.
For the most recent quarter, earnings before interest, taxes, depreciation and amortization (EBITDA)—another measure of profitability—grew 84% from the corresponding quarter a year ago to $414 million, on a gross profit increase of 33% year-over-year to $838 million.
"Over the past quarter, we remained focused on our mission of taking care of our advisors, so they can take care of their clients,” added LPL president and CEO Dan Arnold. "At the same time, we continue to enhance the appeal of our model by helping our advisors differentiate and win with their clients."