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Jefferies Reports 2Q13 Earnings

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Jefferies Group LLC, a wholly-owned subsidiary of Leucadia National Corporation reported its financial result for fiscal second quarter of 2013 (ended May 31) on Jun 18, 2013.     

Jefferies net income in the quarter came in at $42.0 million as against $63.5 million in the year-ago quarter.

Net revenue in the quarter was $643.1 million, down from $706.6 million generated in the year-ago quarter. Revenues from Equities increased 21.7% year over year, while that from Fixed-Income sources were down 27.1%. Investment banking revenues were down 6.7% due to lower revenues from Capital markets and Advisory fees. Asset management fees were strong year over year.

Talking of the expenses, total non-operational expenses surged 13.4% year over year while total non-interest expenses were down 4.3% in the quarter. Tax rate in the quarter came in at 38.3%.
Exiting the quarter, Jefferies had $37 billion of total assets excluding goodwill and intangibles while its total equity was $5.2 billion. Cash and cash equivalents were roughly $3.4 billion. Leverage ratio was at 7.5, down from 9.8 in the year-ago quarter.   

Jefferies Group LLC is a limited liability company formed as a result of the merger of Jefferies Group, Inc. with Leucadia in Mar 2013. Shares of Jefferies Group Inc. were then converted into 0.81 shares of Leucadia, resulting in roughly 35.2% of the latter’s shares in the hands of Jefferies’ shareholders.     

Leucadia is a diversified holding company engaged in beef processing, manufacturing, gaming entertainment, real estate activities, medical product development operations and various other investment-related activities in the United States.

Other major players in the industry are ITT Corporation (ITT - Free Report) , Hutchison Whampoa Ltd. and Compass Diversified Holdings (CODI - Free Report) , each with a Zacks Rank #1 (Strong Buy).

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