LPL Financial Holdings Earnings: Net Income Declines Year-Over-Year

LPL Financial Holdings Inc. (NASDAQ:LPLA) reported its results for the third quarter. LPL Investment provides brokerage and investment advisory services through business relationships with financial advisors, registered investment advisors, and financial institutions.

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LPL Financial Holdings Inc. Earnings Cheat Sheet

Results: Net income for LPL Financial Holdings Inc. fell to $34.3 million (31 cents per share) vs. $36.4 million (32 cents per share) a year earlier. This is a decline of 5.8% from the year-earlier quarter.

Revenue: Rose 2.8% to $907.2 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: LPL Financial Holdings Inc. reported adjusted net income of 47 cents per share. By that measure, the company beat the mean estimate of 41 cents per share. Analysts were expecting revenue of $913.6 million.

Quoting Management: “With the backdrop of an uncertain economic environment, individual investors continued to take a cautious approach to engaging with the markets, which led to the subdued levels of advisor productivity we experienced this quarter,” said Mark Casady, LPL Financial chairman and CEO. “The cornerstone of our success has always been our conflict-free service to our advisors, which enables them to build trusted relationships with their clients and to grow assets on our platform. This foundation remains firmly intact. Our platform continues to attract a diverse set of advisors, including larger practices, RIAs, and retirement producers, in addition to core and financial institution based advisors. For the first nine months of 2012, we added 323 net new advisors. In addition, we continued to see strong asset flows, as reflected by the $2.9 billion in net new advisory assets for the quarter, representing 10% annualized growth. The performance of these fundamentals contributed to recurring revenues growing to 67% of net revenues this quarter.”

Key Stats:

Revenue has increased for four consecutive quarters. Revenue increased 1.5% to $907.8 million in the second quarter. The figure rose 3.2% in the first quarter from the year earlier and climbed 1.1% in the fourth quarter of the last fiscal year from the year-ago quarter.

The company topped expectations last quarter after falling short of forecasts in the second quarter with net income of 45 cents versus a mean estimate of net income of 52 cents per share.

Looking Forward: Over the past sixty days, the outlook for the company’s performance next quarter has become increasingly unfavorable. The average estimate for the fourth quarter is 45 cents per share, a drop from 46 cents. For the fiscal year, the average estimate has moved down from $1.87 a share to $1.85 over the last sixty days.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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