Leucadia Posts Break Even Q3 Results

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Leucadia National Corporation (LUK) posted its financial results for the third quarter of 2013 on Nov 7, 2013. Earnings per share were at a break-even level as compared with 44 cents earnings reported in the year-ago quarter.

GAAP earnings per share in the quarter were a cent after including the gain from disposal of discontinued operations.

Revenue

Leucadia’s net revenues in the quarter increased 15.7% year over year and came in at $2,565.1 million.

The company reports its revenue results under the following heads, which are discussed briefly to reflect Leucadia’s third quarter results:

Revenue from the Beef Processing Services segment accounted for 74.9% of total revenue and settled at roughly $1.9 billion. Investment Banking & Capital Markets, the segment created after the merger with Jefferies, generated $502.8 million in revenue, roughly 19.6% of total revenue.

Revenue from the Domestic Real Estate segment accounted for 0.1% of total revenue and came in at $3.0 million. Revenue from the Medical Product Development segment was $113 thousand compared with $81 thousand in the year-ago quarter.

Proceeds from Other operations were $119.4 million versus $115.6 million in the year-ago quarter and accounted for about 4.7% of total revenue, while the Corporate segment revenue of $18.8 million accounted for about 0.7% of total revenue.
 
Expenses/Margins

Expenses incurred by Leucadia in the third quarter 2013 increased 25.3% year over year to $2.56 billion. Of the total expenses, cost of sales accounted for 74.2% while selling, general and other expenses represented 9.1%. Compensation and benefits paid in the quarter amounted to $326.4 million.
 
Balance Sheet

Exiting the third quarter 2013, Leucadia’s cash and cash equivalent balance improved 24.1% sequentially to $4,410.1 million as compared with $3,553.6 million at the end of the previous quarter. Long-term debt decreased 2.8% sequentially to $7.4 billion.

Cash Flow

Leucadia generated net cash flow from operating activities of $491.2 million, up compared with $199.9 million in the year-ago quarter. Capital spending on property, equipment and leasehold improvements increased 91.8% year over year to $35.1 million.
 
During the quarter, Leucadia paid dividends totaling $23.1 million while the company repurchased no shares.

Leucadia is engaged in beef processing, manufacturing, gaming entertainment, real estate activities, medical product development operations and various other investment-related activities in the United States. The company has a $10.4 billion market capitalization.

Other major players in the industry are Hutchison Whampoa Ltd. (HUWHY), Tyco International Ltd. (TYC) and ITT Corporation (ITT), each with a Zacks Rank #2 (Buy).

Read the Full Research Report on ITT
Read the Full Research Report on TYC
Read the Full Research Report on LUK
Read the Full Research Report on HUWHY


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