Amid market turmoil in the second quarter and a decrease in total assets, broker-dealer LPL Financial saw its advisor count rise and also enjoyed a rise in net income, it said in its earnings release yesterday.
After market close yesterday, LPL Financial released its results for the second quarter, ending June 30. The company’s advisor count rose to 20,871, up 1,757 over the last year and 780 from the first quarter of 2022.
Despite that success, the annualized advisory fees and commissions per advisor fell 6% for the quarter as the market roiled, as did the average total assets per advisor, which fell 12%.
The company said its net income had risen to $161 million, or $1.97 of diluted earnings per share, even as total assets decreased. That net income was up from $119 million in net income, or $1.46 per share, in the second quarter of last year, and up from $134 million, or $1.64 per share, in the first quarter of this year.
The earnings per share before amortization of intangible assets and acquisition costs rose 21% over the year to $2.24.
That beat analyst consensus estimates for the quarter, said Michael Elliott, an equity analyst at CFRA Research, who said his firm used a consensus estimate of $1.95 from S&P Capital IQ.
Zacks Equity Research says on the Nasdaq website, meanwhile, that LPL has beat earnings estimates for the last four quarters. LPL’s stock price was up by about 1.75% by noon today to more than $215 per share. Two years ago, the stock price was closer to $80.
Gross profit rose 18% year over year to $711 million and EBITDA rose 28% to $311 million. Advisory assets fell 3% to $559 billion.
“LPL continues to face headwinds from depressed equity market values and general market volatility,” CFRA’s Elliott said in an email to Financial Advisor. “Depressed equity market values weigh on fee revenues while increased uncertainty often can result in both fewer advisors moving and clients giving advisors less funds to manage. We saw both of these trends playing out in Q2 earnings as advisory fee revenues [decline] while management stated a notable slowdown in advisor movement over the last few quarters.”
In a conference call on Tuesday, company CEO and president Dan Arnold, said total assets decreased to $1.1 trillion as solid organic growth was offset by lower equity markets.