It has been about a month since the last earnings report for Leucadia National Corporation . Shares have lost about 5.8% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Leucadia Beats Q1 Earnings Estimates, Revenues Lag
Leucadia reported solid first-quarter 2017 results with net income of $281.4 million or $0.75 per share, representing a significant turnaround from a loss of $222.9 million or loss of $0.60 per share in the year-ago quarter. The remarkable improvement in earnings was primarily driven by superior performance of Jefferies, investment banking and equities and fixed income businesses. The reported earnings comfortably beat the Zacks Consensus Estimate of $0.67.
Total revenue for the reported quarter increased to $2,868.0 million from $2,015.1 million in the prior-year period due to solid organic growth, but missed the Zacks Consensus Estimate of $2,993 million.
Segmental Performance
In the reported quarter, Leucadia recorded an improved performance in the debt capital market, along with a solid contribution from equity capital markets, advisory activities and a favorable sales and trading environment. With solid margin contribution from National Beef and other businesses in solid shape, Leucadia remains well positioned in 2017.
During the quarter, Jefferies’ revenues more than doubled to $797.4 million from $300.8 million in the year-earlier quarter while National Beef revenues declined to $1,561.5 million from $1,634.5 million. Corporate & Other segment revenues improved to $509.1 million from $79.9 million in the year-ago period.
Acquisitions/Divestures
Subsequent to the end of the quarter, Virtu Financial inked a definitive agreement to acquire KCG for $20.00 per share. This is likely to generate an additional $98 million profit for 24% interest in KCG held at Jefferies, which would be recorded in second-quarter results. The transaction is expected to close during the third quarter.
Balance Sheet and Cash Flow
At quarter end, Leucadia had about $4,261.4 million in cash and cash equivalents with long-term debt of $8,198.4 million. Net cash used in operating activities for the first three months of 2017 was $193.0 million compared with cash utilization of $922.8 million in the prior-year period.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been one revision lower for the current quarter. In the past month, the consensus estimate has shifted downward by 12.5% due to these changes.
VGM Scores
At this time, Leucadia's stock has a poor Growth Score of 'F', however its Momentum is doing a bit better with a 'C'. Charting an exact same path, the stock was allocated a grade of 'C' on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'D'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is suitable for momentum and value investors.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Notably, the stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.
Image: Bigstock
Leucadia (LUK) Down 5.8% Since Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Leucadia National Corporation . Shares have lost about 5.8% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Leucadia Beats Q1 Earnings Estimates, Revenues Lag
Leucadia reported solid first-quarter 2017 results with net income of $281.4 million or $0.75 per share, representing a significant turnaround from a loss of $222.9 million or loss of $0.60 per share in the year-ago quarter. The remarkable improvement in earnings was primarily driven by superior performance of Jefferies, investment banking and equities and fixed income businesses. The reported earnings comfortably beat the Zacks Consensus Estimate of $0.67.
Total revenue for the reported quarter increased to $2,868.0 million from $2,015.1 million in the prior-year period due to solid organic growth, but missed the Zacks Consensus Estimate of $2,993 million.
Segmental Performance
In the reported quarter, Leucadia recorded an improved performance in the debt capital market, along with a solid contribution from equity capital markets, advisory activities and a favorable sales and trading environment. With solid margin contribution from National Beef and other businesses in solid shape, Leucadia remains well positioned in 2017.
During the quarter, Jefferies’ revenues more than doubled to $797.4 million from $300.8 million in the year-earlier quarter while National Beef revenues declined to $1,561.5 million from $1,634.5 million. Corporate & Other segment revenues improved to $509.1 million from $79.9 million in the year-ago period.
Acquisitions/Divestures
Subsequent to the end of the quarter, Virtu Financial inked a definitive agreement to acquire KCG for $20.00 per share. This is likely to generate an additional $98 million profit for 24% interest in KCG held at Jefferies, which would be recorded in second-quarter results. The transaction is expected to close during the third quarter.
Balance Sheet and Cash Flow
At quarter end, Leucadia had about $4,261.4 million in cash and cash equivalents with long-term debt of $8,198.4 million. Net cash used in operating activities for the first three months of 2017 was $193.0 million compared with cash utilization of $922.8 million in the prior-year period.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been one revision lower for the current quarter. In the past month, the consensus estimate has shifted downward by 12.5% due to these changes.
Leucadia National Corporation Price and Consensus
Leucadia National Corporation Price and Consensus | Leucadia National Corporation Quote
VGM Scores
At this time, Leucadia's stock has a poor Growth Score of 'F', however its Momentum is doing a bit better with a 'C'. Charting an exact same path, the stock was allocated a grade of 'C' on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'D'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is suitable for momentum and value investors.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Notably, the stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.