Leucadia National Corporation LUK reported year-over-year decline in bottom line for second-quarter 2015. Earnings from continuing operations came in at 4 cents per share, down from 18 cents earned in the year-ago quarter. The weak earnings performance was triggered by a decline in revenues and increase in costs and expenses.
Revenues
Leucadia generated net revenue of $2,839.5 million in the quarter, down 0.4% from the year-ago tally of $2,852 million. The company’s segmental performance is briefly discussed below:
Revenues from the National Beef segment were $1,994.9 million, down 0.7% year over year. It represented 70.3% of net revenue.
Jefferies generated revenues of $792.4 million, accounting for roughly 27.9% of net revenue. The segmental revenues increased 15% year over year.
Revenues from Corporate and other segment fell 29.1% year over year to $13.8 million. It represented 0.5% of net revenue.
Expenses/margins
Leucadia’s cost of sales edged up 0.4% year over year for second-quarter 2015, representing 72.2% of net revenue versus 71.6% in the year-ago quarter. Selling, general and other expenses constituted 5.5% of net revenue, down 70 basis points (bps) year over year. Compensation and benefits amounted to $517.3 million as against $424.2 million recorded a year ago.
Balance Sheet
Exiting second-quarter 2015, Leucadia had cash and cash equivalents of $3,491 million, down 1% from $3,524.5 million in the preceding quarter. Long-term debt was $8,454.5 million, down from $8,558.8 million at the end of first-quarter 2015.
Cash Flow
In first-half 2015, Leucadia used cash of $1,693.9 million for its operating activities as against $1,112.2 million used in the year-ago comparable quarter. Capital spending on property, equipment and leasehold totaled $137.9 million, down from $167.1 million in the year-ago quarter. Cash dividends paid amounted to $46.5 million.
Leucadia currently has a market capitalization of $8.5 billion. Some major players in the diversified operations industry include Koninklijke KPN N.V. KKPNF, MarketAxess Holdings Inc. MKTX and Morgan Stanley MS. All these stocks carry a Zacks Rank #2 (Buy).
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