WORST: 12th place. WADDELL & REED — Earnings $46.3 million, DOWN 14% | EPS $0.58, DOWN 9% | Advisor headcount 1,074, DOWN 407. | Waddell & Reed headquarters in Shawnee Mission, Kansas.
11th place. AMERIPRISE FINANCIAL — Earnings $503 million, DOWN 1% | EPS $3.43, UP 5% | Advisor headcount 9,933, UP 43. | Ameriprise headquarters in Minneapolis.
10th place. CITIGROUP — Earnings $4.62 billion, UP 12% | EPS $1.73, UP 22% | Private bank revenue $849 million, UP 7%. | Citigroup headquarters in New York (Photo: AP)
9th place. MORGAN STANLEY — Earnings $2.11 billion, UP 18.59% | EPS $1.17, UP 26% | Advisor headcount 15,655, DOWN 104. | Morgan Stanley CEO James Gorman. (Photo: Bloomberg)
8th place. GOLDMAN SACHS — Earnings $2.52 billion, UP 18.61% | EPS $6.928, UP 25% | Investment management sales of $1.70 billion, UP 12%. | David Solomon, president and CEO of Goldman Sachs. (Photo: Bloomberg)
7th place. JP MORGAN — Earnings $8.38 billion, UP 24% | EPS $2.34, UP 33% | Wealth advisor headcount 2,808, UP 227. | JPMorgan building in New York. (Photo: AP)
6th place. UBS — Earnings 1.246 billion Swiss francs, UP 31.71% | EPS 0.32 Swiss francs, UP 28% | Advisor headcount-Americas 6,910, UP 49. | A UBS bank entrance sign (Photo: AP)
5th place. BANK of AMERICA — Earnings $7.167 billion, UP 32.1% | EPS $0.62, UP 43% | Advisor headcount 14,838, DOWN 116. | BofA CEO Brian Moynihan. (Photo: AP)
4th place. WELLS FARGO — Earnings $6 billion, UP 32.3% | EPS $1.13, UP 36% | Advisor headcount 14,074, DOWN 490. | A Wells Fargo branch office. (Photo: Bloomberg)
3rd place. RAYMOND JAMES — Earnings $262.8 million, UP 36% | EPS $1.76, UP 34% | Advisor headcount 7,813, UP 467. | Raymond James CEO Paul Reilly.
2nd place. STIFEL FINANCIAL — Earnings $101.5 million, UP 56% | EPS $1.25, UP 58% | Advisor headcount 2,298, UP 46. | Stifel CEO Ronald Kruszewski. (Photo: Bloomberg)
BEST. 1st place. LPL FINANCIAL — Earnings $106.9 million, UP 84% | EPS $1.19, UP 89% | Affiliated financial advisors 16,174, UP 1,921. | LPL CEO Dan Arnold.
(Related: 12 Best & Worst Broker-Dealers: Q2 Earnings)
The third quarter was a good one for most financial companies and broker-dealers, which benefited from a strong economy, tax breaks and a nearly 8% rise in the S&P 500.
According to FactSet, three-quarters of financial companies reported earnings that topped estimates.
Overall, the financial sector had average earnings growth of 36% in Q3. Diversified financial firms within this group had an improvement of 103%, while banks grew earnings 22%.
Close to 90% of financial firms reported an increase in their net profit margins in the latest quarter vs. Q3’17, FactSet said.
Commercial banks and savings institutions, for instance, had total net income of $62 billion in Q3, up 30% from a year ago, according to the Federal Deposit Insurance Corporation.
Of the broker-dealers highlighted in this slideshow, the average increase in net income was 27.5% in Q3’18, down from an average of 35% in Q2’18.
As for what’s next, FactSet expects the financial sector to report an average earnings improvement of 17% in Q4’18 and a 5% bump in average revenue.
So far, though, this final quarter of 2018 is proving to be a bumpy one for broker-dealers and companies across industries, especially the energy sector. On Nov. 23, the S&P 500 index dropped into correction territory.
“The loss of earnings momentum from higher interest rates, coupled with sluggish loan growth and credit worries have financial stock investors nervous,” according to Frederick Cannon, CFA, and Luke Wooten of KBW.
All figures cited in the gallery above reflect year-over-year changes in performance.
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