Oppenheimer Posts Adjusted EPS of $1.81 as Revenue Falls 10%
Key Facts
Oppenheimer Holdings reported adjusted diluted earnings per share of $1.81 in the third quarter of 2026, compared with $2.77 in the same period of 2025, while revenue fell 10% to $382 million from $424.4 million. Chief Executive Robert Lowenthal said the results were "disappointing" because of lower retail trading activity and a decline in investment banking volumes. The results showed a divergence between the wealth management segment, where revenue increased, and capital markets, where revenue contracted and the segment recorded a pretax loss. Results were also affected by a pretax expense of $21 million for a long-term incentive program for financial advisers linked to the company's share price. The company's shares, which trade under the symbol OPY, closed at $107.94 on October 29, 2026.
Net income under accounting standards was $5.5 million, or $0.52 per basic share, compared with $21.7 million and $2.06 per share in the third quarter of 2025. On an adjusted basis, net income was $20.9 million and basic earnings per share were $1.96, down from $31.7 million and $3.01 per share a year earlier. Adjusted diluted earnings per share were $1.81, compared with $2.77. These measures present different views of results: adjusted figures exclude items including the incentive expense linked to share-price movements, while figures under accounting standards show the net income and basic earnings per share recorded for the period. Lowenthal said higher stock appreciation rights expense was among the factors that weighed on quarterly results.
Wealth management revenue was $266.2 million, up 2.5% year over year, but the segment's pretax income fell 11% to $55.6 million. Performance within the business varied: retail commissions declined 13.9% amid weaker trading, while advisory fees rose 15.3% as average assets under management increased during the fee calculation period. Assets under management were $59.6 billion on September 30, 2026, a new record, compared with $55.1 billion a year earlier. Assets under administration also rose to $153.7 billion from $143.5 billion on the same date a year earlier. Thus, higher assets accompanied growth in advisory fees, but did not prevent a decline in the segment's pretax income during the quarter.
The company said the $4.5 billion year-over-year increase in assets under management through September 30, 2026, resulted from a $6.2 billion rise in the value of existing client holdings, offset by net distributions of $1.7 billion. This means the increase in the value of existing assets exceeded the funds withdrawn through distributions, resulting in net growth in assets under management. Shareholders' equity reached a record $991.1 million at the end of September. These figures provide one view of wealth management's quarterly performance, as segment pretax income declined despite increases in revenue and assets. Advisory services revenue reflected this divergence, rising with higher average assets, while lower trading activity weighed on retail commissions.
By contrast, capital markets revenue fell 29.7% to $114 million, and the segment posted a pretax loss of $9.9 million, after recording income of $12.3 million in the third quarter of 2025. The company said the revenue decline included investment banking, transaction commissions and some trading-related revenue, partly offset by higher advisory fees. In trading, equity trading revenue rose 14.7% year over year, while fixed income trading revenue fell 23.8%. Lowenthal cited lower investment banking volumes, adding that uncertainty about investor reception slowed initial public offering activity. He also said a decline in retail trading activity contributed to weaker results, along with higher stock appreciation rights expense.
The $21 million pretax incentive expense was tied to a long-term program for financial advisers based on the share price. The company said its shares rose $12.42 during the quarter, from $105.54 to $117.96, compared with an increase of $8.14, from $65.77 to $73.91, in the same period a year earlier. This movement made the program expense a material factor in assessing the difference between net income and earnings per share under accounting standards and the adjusted measures. At the same time, the company reported record shareholders' equity of $991.1 million on September 30, 2026. These indicators did not alter the direction of total revenue during the quarter, which was below its year-earlier level, but they put the incentive cost among the factors affecting results.
The board declared a quarterly cash dividend of $0.20 per share, payable on November 27, 2026, to shareholders of record on November 13. The announcement follows a quarter in which net income and revenue were below year-earlier levels, with performance differing between the wealth management and capital markets segments. Results included growth in assets under management and advisory fees, against declines in retail commissions and a pretax loss in capital markets. OPY shares closed at $107.94 on October 29, 2026. The company's announcement sets the next record and payment dates, while the reported financial results covered the third quarter ended in 2026.