Leucadia Q2 Earnings Improve on Rev Growth

Zacks

Leucadia National Corporation (LUK) posted its financial results for the second quarter of 2013 on Aug 6, 2013. Net results improved year-over-year with earnings per share from continuing operations coming in at 14 cents as compared with 80 cents loss incurred in the year-ago quarter.  

Revenue

Leucadia reported a 54.9% year over year increase in its net revenue in the second quarter 2013, which came in at $2.7 billion.

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

Revenue from the Beef Processing Services segment accounted for 71.0% of total revenue and settled at roughly $1.9 billion. Investment Banking & Capital Markets, the segment created after the merger with Jefferies, generated $651.5 million in revenue, roughly 24.1% of total revenue.

Revenue from the Domestic Real Estate segment accounted for 0.1% of total revenue and came in at $3.7 million. Revenue from the Medical Product Development segment was $119 thousand compared with $125 thousand in the year-ago quarter.

Proceeds from Other operations were $111.0 million versus $110.9 million in the year-ago quarter and accounted for about 4.1% of total revenue, while the Corporate segment revenue of $18.4 million accounted for about 0.7% of total revenue.
 
Expenses/Margins

Expenses incurred by Leucadia in the second quarter 2013 increased 30.8% year over year to $2.65 billion and represented 98.3% of total revenue. Of the total expenses, cost of sales accounted for 72.3% while selling, general and other expenses represented 8.3%. Compensation and benefits paid in the quarter amounted to $414.1 million.
 
Balance Sheet

Exiting the second quarter 2013, Leucadia’s cash and cash equivalent balance stood at $3.6 billion, an increase of 16.1% sequentially. Long-term debt decreased 2.6% sequentially to $7.6 billion.

Cash Flow

Leucadia in the second quarter 2013 generated $610.8 million in cash from operating activities as compared with $105.9 million in the year-ago comparable quarter. Spending on property, equipment and leasehold improvements more than doubled in the quarter and totaled $33.5 million.

During the quarter, Leucadia paid dividends totaling $22.2 million while it 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.

Other major players in the industry are Hutchison Whampoa Ltd. (HUWHY), with a Zacks Rank #1 (Strong Buy) while ITT Corporation (ITT) and United Technologies Corp. (UTX), each come with a Zacks Rank #2 (Buy).

Read the Full Research Report on ITT

Read the Full Research Report on UTX

Read the Full Research Report on LUK

Read the Full Research Report on HUWHY

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