LPL profit beats estimates; outsourcing plan set
Feb 6 (Reuters) - LPL Financial Holdings Inc reported a higher-than-expected quarterly profit on Wednesday as adviser activity improved at the end of 2012, and the independent brokerage said it would outsource certain work.
The Boston-based company said fourth-quarter earnings fell to $36.9 million, or 34 cents a share, from $39.5 million, or 35 cents a share, a year earlier.
Excluding charges and other items, earnings per share rose 13.6 percent to 50 cents. Analysts on average had forecast 48 cents, according to Thomson Reuters I/B/E/S.
Net revenue rose 13.9 percent to $944.2 million, above analysts' expectations of $918.2 million.
LPL, which sells technology, clearing and other services to self-employed brokers, said its adviser headcount rose by 182 during the quarter to end the year at 13,352.
The company also said on Wednesday that it planned to outsource certain nonadviser-facing functions to firms that specialize in them. The changes to its labor force are part of a broader program called Service Value Commitment, which it expects to complete in 2015.
"This effort is not simply a cost-reduction exercise, but an initiative to implement changes to our foundational technology, enhance the quality of our work and improve the speed of our delivery," Chief Executive Officer Mark Casady said in a statement.
LPL said it expects the outsourcing to cost $70 million to $75 million through 2014.
Client assets in fee-based advisory programs rose 20 percent to $122.1 billion in the fourth quarter, while overall client assets at the brokerage rose 13 percent to $373.3 billion.
Commission revenue rose 15.6 percent from a year earlier.
The company also said on Wednesday that it increased its quarterly dividend 12.5 percent to 13.5 cents a share.