By Kenneth Corbin

LPL Financial handily topped analysts' estimates with its third-quarter results.

The nation's largest independent broker-dealer reported adjusted earnings of $4.16 a share, 12% ahead of the FactSet consensus forecast of $3.71. Third-quarter adjusted EPS was 11% ahead of the same period last year.

Total revenue came in at $3.10 billion for the period, ahead of the analyst consensus for $3.04 billion and up 23% from last year's mark of $2.52 billion. LPL shares jumped 1.9% to $269.00 in after-market trading Wednesday following the earnings news. The stock is off its 52-week high of $289.88 reached in June but has been recovering from a late-summer swoon that saw it dip under $200.

The San Diego-based company began the fourth quarter on a rocky note with the unexpected ouster of former CEO Dan Arnold. LPL's board of directors said Arnold had violated the company's code of conduct in unspecified statements he had made to employees, sparking a guessing game as to what he actually said.

LPL tapped Rich Steinmeier, the company's chief growth officer, as interim CEO, and later this month announced that he would take the top spot on a permanent basis. As part of that announcement, LPL said that CFO Matthew Audette would also serve as president of the company.

Steinmeier had been instrumental in guiding LPL's growth through an aggressive recruiting strategy as well as acquisitions of smaller brokers. LPL ended the third quarter with 23,686 advisors, up 1,282 from the same period last year, and $1.6 trillion in advisory and brokerage assets, up 29% year over year.

"I joined LPL with the mandate to accelerate our growth," Steinmeier says. "Looking forward, our opportunity is clear -- to assert our leadership and shape both the advisor and institutional markets."

This is breaking news. Read a preview of LPL Financial's earnings below and check back for more analysis soon.

When LPL Financial reports third-quarter results after the markets close on Wednesday, analysts are expecting earnings of $3.71 per share, off slightly from the $3.74 the company posted for the same period a year ago.

Analysts are looking for total revenue of $3.04 billion, up nearly 22% from the $2.5 billion LPL reported in the third quarter of 2023.

LPL stock was trading around $265 as of midafternoon Wednesday, down about a tenth of a percentage point. Shares are off from a 52-week high of $289.88 reached in June but have been recovering from a late-summer swoon that saw the company's stock dip under $200.

LPL, the nation's largest independent broker-dealer, began the fourth quarter on a rocky note with the unexpected ouster of former CEO Dan Arnold. LPL's board of directors said Arnold had violated the company's code of conduct in unspecified statements he had made to employees, sparking a guessing game as to what he actually said.

"LPL's code of conduct requires every employee, no matter their title, to foster a supportive and professional workplace and show respect to each other, our stakeholders, and the broader community," James Putnam, chair of the board of directors, said in a statement early October. "Mr. Arnold failed to meet these obligations."

LPL tapped Rich Steinmeier, the company's chief growth officer, as interim CEO, and later this month announced that he would take the top spot on a permanent basis. As part of that announcement, LPL said that CFO Matthew Audette would also serve as president of the company.

Steinmeier had been instrumental in guiding LPL's growth through an

aggressive   recruiting   strategy as well as acquisitions of smaller brokers. LPL ended the second quarter with 23,000 advisors and $1.5 trillion in advisory and brokerage assets. 

Those recruiting efforts haven't been without controversy. Currently LPL is embroiled in a lawsuit brought by rival brokerage Ameriprise Financial, which accused it of encouraging advisors to take confidential information with them as they left to join LPL.

Some of LPL's notable recent acquisitions include Atria Wealth Solutions, a wealth management operation that supported roughly 2,400 advisors and 150 banks and credit unions. LPL announced that acquisition in February and closed it on the same day the board fired Arnold.

In September, LPL said that it was acquiring The Investment Center, an independent broker-dealer and registered investment advisor with 240 advisors and roughly $9 billion of client assets. That deal is expected to close in the first half of next year.

Meanwhile, LPL also is looking to expand custody options for its advisors with a pilot program that would allow them to hold client assets with outside custodians. LPL launched the pilot program "in response to requests from advisors," a spokeswoman says. "Providing this optionality serves to help our advisors grow their businesses with clients who are unable to change their custody relationship for various reasons," she says.

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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October 30, 2024 17:14 ET (21:14 GMT)

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