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Leucadia (LUK) Earnings & Revenues Beat Estimates in Q4
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Leucadia National Corporation reported relatively healthy fourth-quarter 2017 results with record results from two of its largest businesses, namely Jefferies and National Beef. Net loss for the reported quarter was $271.6 million or loss of 74 cents per share against net income of $137.2 million or 37 cents per share in the year-ago quarter. The year-over-year decrease in earnings was primarily due to non-cash charges related to the Tax Act.
Excluding non-recurring items, adjusted earnings for the reported quarter were 48 cents per share, which beat the Zacks Consensus Estimate by a penny.
For full year 2017, net income was $167.4 million or 45 cents per share compared with $125.9 million or 34 cents per share in 2016.
Total revenues for the reported quarter increased to $2,939.5 million from $2,745.8 million in the prior-year period on the back of solid organic growth. Revenues exceeded the Zacks Consensus Estimate of $2,909 million. For full year 2017, revenues improved to $11,436.4 million from $10,062.6 million in 2016.
Leucadia National Corporation Price, Consensus and EPS Surprise
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 significant margin contribution from National Beef and other businesses, Leucadia remains well positioned to grow.
During the quarter, Jefferies’ revenues increased to $825.1 million from $742.8 million in the year-earlier quarter, primarily driven by sustained improvement in investment banking business. National Beef revenues were up to $1,882.7 million from $1,847.1 million owing to positive cattle supply environment, strong domestic and export demand due to focus on the highest quality cattle and flawless execution. The overall industry is likely to benefit from favorable supply and demand dynamics, with demand improving from increasing income levels and supply benefiting from the continued growth in cattle available for processing. Revenues from Other Financial Services businesses including FXCM, HomeFed, Leucadia Asset Management, Berkadia and Foursight Capital increased to $38.5 million from $25.3 million. Other Merchant Banking businesses recorded revenues of $162.1 million compared with $120.3 million. Corporate & Other segment revenues improved to $31.1 million from $10.2 million in the year-ago period.
Moving Forward
Leucadia ended 2017 with about $1.5 billion in liquidity. The company intends to continue to support growth of existing businesses as well as capitalize on new business opportunities to deploy capital smartly. At the same time, management intends to return capital to shareholders through share buybacks and dividends.
3M has a long-term earnings growth expectation of 10.2%. It has a positive earnings surprise history with an average of 3.2% in the trailing four quarters, beating estimates thrice.
Barloworld has a long-term earnings growth expectation of 15.9%.
Hitachi has a long-term earnings growth expectation of 13%. It has a positive earnings surprise history with an average of 44% in the trailing four quarters, beating estimates in each quarter.
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Leucadia (LUK) Earnings & Revenues Beat Estimates in Q4
Leucadia National Corporation reported relatively healthy fourth-quarter 2017 results with record results from two of its largest businesses, namely Jefferies and National Beef. Net loss for the reported quarter was $271.6 million or loss of 74 cents per share against net income of $137.2 million or 37 cents per share in the year-ago quarter. The year-over-year decrease in earnings was primarily due to non-cash charges related to the Tax Act.
Excluding non-recurring items, adjusted earnings for the reported quarter were 48 cents per share, which beat the Zacks Consensus Estimate by a penny.
For full year 2017, net income was $167.4 million or 45 cents per share compared with $125.9 million or 34 cents per share in 2016.
Total revenues for the reported quarter increased to $2,939.5 million from $2,745.8 million in the prior-year period on the back of solid organic growth. Revenues exceeded the Zacks Consensus Estimate of $2,909 million. For full year 2017, revenues improved to $11,436.4 million from $10,062.6 million in 2016.
Leucadia National Corporation Price, Consensus and EPS Surprise
Leucadia National Corporation Price, Consensus and EPS Surprise | Leucadia National Corporation Quote
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 significant margin contribution from National Beef and other businesses, Leucadia remains well positioned to grow.
During the quarter, Jefferies’ revenues increased to $825.1 million from $742.8 million in the year-earlier quarter, primarily driven by sustained improvement in investment banking business. National Beef revenues were up to $1,882.7 million from $1,847.1 million owing to positive cattle supply environment, strong domestic and export demand due to focus on the highest quality cattle and flawless execution. The overall industry is likely to benefit from favorable supply and demand dynamics, with demand improving from increasing income levels and supply benefiting from the continued growth in cattle available for processing. Revenues from Other Financial Services businesses including FXCM, HomeFed, Leucadia Asset Management, Berkadia and Foursight Capital increased to $38.5 million from $25.3 million. Other Merchant Banking businesses recorded revenues of $162.1 million compared with $120.3 million. Corporate & Other segment revenues improved to $31.1 million from $10.2 million in the year-ago period.
Moving Forward
Leucadia ended 2017 with about $1.5 billion in liquidity. The company intends to continue to support growth of existing businesses as well as capitalize on new business opportunities to deploy capital smartly. At the same time, management intends to return capital to shareholders through share buybacks and dividends.
Leucadia currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the industry include 3M Company (MMM - Free Report) , Barloworld Limited (BRRAY - Free Report) and Hitachi, Ltd. (HTHIY - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
3M has a long-term earnings growth expectation of 10.2%. It has a positive earnings surprise history with an average of 3.2% in the trailing four quarters, beating estimates thrice.
Barloworld has a long-term earnings growth expectation of 15.9%.
Hitachi has a long-term earnings growth expectation of 13%. It has a positive earnings surprise history with an average of 44% in the trailing four quarters, beating estimates in each quarter.
Zacks Top 10 Stocks for 2018
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2018?
Last year's 2017 Zacks Top 10 Stocks portfolio produced double-digit winners, including FMC Corp. and VMware which racked up stellar gains of +67.9% and +61%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2018 today >>