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2011 Q1 Earnings: LPL Profits Jump 91.7%; Founder, President to Sell Big Stakes

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LPL Financial Inc. (LPLA) on Tuesday reported first-quarter 2011 profits of $49.0 million, 91.7% higher than $25.6 million in profits it reported a year ago. In addition, LPL, the largest independent broker-dealer, announced in an SEC filing that the company’s founder and president were selling large portions of their stock holdings as part of a 6.2 million share offering.

Earnings per share totaled $0.43, and adjusted EPS totaled $0.52, compared with the average EPS expectations of $0.48 as estimated by 11 analysts surveyed by Yahoo! Finance.

Revenues came in 17.5% higher at $873.9 million versus $743.4 million a year ago, according to LPL’s Q1 2011 earnings release.

In a separate release, LPL announced a secondary offering of up to 6.2 million shares of its common stock by “certain minority stockholders.” The company itself is not selling any shares in this offering, and will not receive any of the proceeds from the shares of common stock sold.

LPL’s filing with the Securities and Exchange Commission shows that company founder Todd Robinson and President and Chief Operating Officer Esther Stearns each plan to sell about one-third of their common stock in the company.

Robinson, who owns 2.7% of LPL’s stock, is selling 981,148 of his 2.9 million share ownership. Stearns is selling 214,400 of her 765,816 shares. In midafternoon trading on Tuesday, LPLA shares were selling at around $34.53 per share, which would put Robinson's take at $33.9 million and Stearns' at $7.4 million.

Also selling big stakes are Goldman Sachs, which has all of its 1 million of LPLA shares on offer, and Pacific Life Insurance Co., which also is selling its entire ownership of stock in the company, at 2.65 million shares. Goldman’s ownership stake is 1% and Pac Life’s is 2.4%.

In the prior quarter, Q4 2010, LPL announced its first quarterly and FY results as a public company, and costs related to its initial public offering resulted in a net loss of $57 million for the year and $116 million for the quarter. The year-on-year loss came to $1.20 per diluted share, and the quarter-on-quarter loss came to $0.64 per diluted share.

This quarter, LPL reported a 16.0% rise in total assets under administration of $330.1 billion versus $284.6 billion a year ago at this time. Advisory assets under management rose 23.1% to $99.7 billion versus $81.0 billion a year ago.

Net new advisory assets rose 164.3% to $3.7 billion from $1.4 billion. This represents average net new assets per FA of about $295,000 for the quarter.

LPL also saw a gain in the number of advisors in Q1 2011, with a 4.4% rise to 12,554 from 12,026. Thus, average assets per advisor stand at roughly $26.3 million. 

The broker-dealer's total sales per rep (including all services) were $69,600 or $278,400 on an annualized basis. Its total production per FA (broken out as an expense) was $48,000 in the quarter, or $192,500 on a 12-month basis. 

"We began the year with solid results, driven primarily by the increased activity of our advisors," said LPL Financial Chairman and CEO Mark Casady (left) in a statement. "Improving investor sentiment and market conditions provided a strong backdrop for our advisors to grow their businesses. To help our financial advisors capitalize on this opportunity, we have continued to expand and enhance our investment platforms and practice management tools and programs."

For more information on earnings read AdvisorOne’s 2011 Q1 Earnings Calendar for the Financial Sector.


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