Leucadia National Corporation’s (LUK) wholly owned subsidiary, Jefferies Group LLC reported its results for second-quarter fiscal 2014 (ended May 31, 2014) yesterday. Net earnings came in at $61.3 million, up a massive 55.2% from $39.5 million recorded in the year-ago quarter.
Jefferies’ net revenue jumped 9.8% year over year to $723.0 million. The top-line improvement can be attributed to a 36.3% increase in revenues derived from Principal transactions, a 19.5% hike in Investing banking revenues and 9.6% growth in Interest income.
Interest expense was $247.8 million, 17.2% higher year over year. Compensation and benefits paid were $404.9 million, reflecting an increase of 8.3% year over year while non-compensation expenses increased 1.4% to $219.0 million.
Total assets of Jefferies at quarter end were $43.6 billion, including cash and cash equivalents of approximately $4.0 billion. Total equity, including non-controlling interests, was $5.5 billion. Adjusted leverage ratio was 10.0 versus 9.9 in the year-ago quarter.
Jefferies merged with Leucadia in Mar 2013 and became a limited liability company, Jefferies Group LLC. It handles Leucadia’s investment banking and capital markets operations. Revenues generated from this business accounted for 31.6% of Leucadia’s total revenue in first-quarter 2014.
Leucadia currently has a market capitalization of $9.8 billion. The company primarily engages in beef processing, manufacturing, real estate activities and various other investment-related affairs in the U.S.
Some major players in the diversified operations industry include CLARCOR Inc. (CLC), Carlisle Companies Incorporated (CSL) and Noble Group Limited (NOBGY). While CLARCOR sports a Zacks Rank #1 (Strong Buy), Carlisle Companies and Noble Group carry a Zacks Rank #2 (Buy).
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