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Leucadia (LUK) Reports Q3 Loss on Weak Segmental Results

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Leucadia National CorporationLUK reported disappointing results for third-quarter 2015, reporting a loss of $128.9 million or 35 cents per share on an adjusted basis. This compared unfavorably with earnings from continuing operations of 4 cents per share recorded in the preceding quarter. The weak earnings performance was triggered by a decline in revenues, partially offset by lower expenses.

Revenues

Leucadia's net revenue in the quarter totaled $2,366.1 million, decreasing 21.2% year over year. On an adjusted basis, revenues summed $2,370.4 million.

The company's segmental performance is briefly discussed below:

Revenues from the National Beef segment were $1,864 million, down 6% year over year; while Jefferies generated revenues of $580.5 million. The segmental revenues decreased 30.9% year over year. Revenues from Corporate and other segment fell to $2.3 million from $10.2 million in the year-ago quarter.

Expenses/Margins

Leucadia's third-quarter 2015 cost of sales declined 3.2% year over year, representing 81.9% of net revenue compared with 66.6% in the year-ago quarter. Selling, general and other expenses constituted 9.2% of net revenue, up 40 basis points (bps) year over year. Compensation and benefits totaled $375.5 million as against $516.6 million recorded a year ago.

Balance Sheet

Exiting third-quarter 2015, Leucadia's cash and cash equivalents increased to $3,559.3 million from $3,491 million in the prior quarter. Long-term debt was $7,856.7 million, down from $8,454.5 million at the end of second-quarter 2015.

Cash Flow

In the first three quarters of 2015, Leucadia used cash of $1,180.3 million for its operating activities as against $1,264.3 million used in the year-ago comparable period. Capital expenditure on property, equipment and leasehold totaled $212.6 million, down from $470.8 million spent in the year-ago quarter. Cash dividends paid amounted to $69.7 million.

During the quarter, the company bought back 4.4 million of common shares at an average price of $20.79 per share.

Leucadia currently has a market capitalization of $7.1 billion. Some major players in the diversified operations industry include E*TRADE Financial Corporation ETFC , Compass Diversified Holdings CODI and Swire Pacific Limited SWRAY . While E*TRADE Financial sports a Zacks Rank #1 (Strong Buy), both Compass Diversified and Swire Pacific Limited carry a Zacks Rank #2 (Buy).

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E TRADE FINL CP (ETFC): Free Stock Analysis Report

COMPASS DIVERSF (CODI): Free Stock Analysis Report

SWIRE PAC ADR A (SWRAY): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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