Leucadia National Corporation LUK reported disappointing results for fourth-quarter 2014. The company’s bottom line reflected a loss of 1 cent per share as compared with earnings of 5 cents per share in the year-ago quarter.
For 2014, the company’s earnings from continuing operations came in at 58 cents per share, down from $1.20 per share in 2013.
Revenues
Leucadia generated net revenue of $2,688.4 million in the fourth quarter, reflecting a year-over-year decline of 8%.
For 2014, net revenue was $11,486.5 million, up 10.2% year over year. The company’s segmental performance has been discussed below:
Revenues from the National Beef segment were $7,832.4 million, up 4.6% year over year. It represented 68.2% of net revenue in 2014.
Jefferies generated revenues of $2,986.3 million, accounting for roughly 26% of net revenue. Compared with the year-ago quarter, the segmental revenues jumped 39.9% year over year.
Revenues from Corporate and other segment, which comprises manufacturing, energy projects, asset management and real estate businesses, rose 21% year over year to $60.7 million. It represented 0.5% of net revenue.
Expenses/margins
Leucadia’s cost of sales increased 6% year over year in 2014, representing 69.9% of net revenue versus 72.6% in 2013. Selling, general and other expenses constituted 7% of net revenue, up 50 basis points year over year. Compensation and benefits amounted to $1,841.7 million versus $1,352.7 million recorded in the preceding year.
Operating margin was 2.1% in 2014 versus 4.1% in 2013.
Balance Sheet
Exiting fourth-quarter 2014, Leucadia had cash and cash equivalents of $4,276.8 million as against $4,247.9 million in the preceding quarter. Long-term debt inched down 1.1% to $8,527.9 million compared with $8,619.2 million at the end of third-quarter 2014.
Cash Flow
In 2014, Leucadia used cash of $987.2 million for its operating activities versus $702.3 million of cash generated in 2013. Capital spending on property, equipment and leasehold totaled $598.7 million, coming significantly above $137.1 million spent in the previous year. Cash dividends paid amounted to $93.1 million.
Leucadia currently has a market capitalization of $8.7 billion. Some major players in the diversified operations industry include Swire Pacific Limited SWRAY, Danaher Corp. DHR and Federal Signal Corp. FSS. While Swire Pacific sports a Zacks Rank #1 (Strong Buy), both Danaher and Federal Signal carry a Zacks Rank #2 (Buy).
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