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Leucadia Posts Break Even Q3 Results

Zacks Equity Research

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.


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

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