Leucadia (LUK) Surpasses Q3 Earnings & Revenue Estimates

Leucadia (LUK) Surpasses Q3 Earnings & Revenue Estimates

Leucadia National Corporation LUK reported relatively healthy third-quarter 2017 results with net income of $99.4 million or 27 cents per share compared with $154.4 million or 41 cents per share in the year-ago quarter. The year-over-year decrease in earnings was due to unrealized pre-tax mark-to-market gain of $91.8 million in the third quarter of 2016. However, earnings comfortably beat the Zacks Consensus Estimate of 17 cents.

Total revenues for the reported quarter increased to $2,896.5 million from $2,676.4 million in the prior-year period due to solid organic growth. Revenues also exceeded the Zacks Consensus Estimate of $2,655 million.

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 improved to $802.9 million from $656.5 million in the year-earlier quarter primarily driven by record investment banking revenues of $476 million. National Beef revenues increased to $2,039.3 million from $1,747 million owing to a balanced supply of cattle and robust end-market demand. Revenues from Other Financial Services businesses including FXCM, HomeFed, Leucadia Asset Management, Berkadia and Foursight Capital declined to $37.7 million from $54.7 million. Other Merchant Banking businesses recorded a negative return on investment of $5.1 million as against revenues of $217.1 million owing to lower industry-wide sales trends and a few underperforming stores of Garcadia. Corporate & Other segment revenues improved to $21.7 million from $1 million in the year-ago period.

Other Financial Details

During the reported quarter, Leucadia repurchased 2.5 million shares at an average price of $24.89 per share, bringing its repurchase tally to 12.5 million shares over the past three years at an average price of $20.98 per share. Leucadia currently has 12.5 million shares remaining for repurchase.

Moving Forward

Leucadia currently carries a Zacks Rank #2 (Buy). Other stocks in the industry worth considering include Danaher Corporation DHR , Honeywell International Inc. HON and ITT Inc. ITT , each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here .

Danaher has a long-term earnings growth expectation of 10.6%. It has a positive earnings surprise history with an average of 2.6% for the trailing four quarters, beating estimates in each.

Honeywell has a long-term earnings growth expectation of 9.2%. It has a positive earnings surprise history with an average of 1.2% for the trailing four quarters, beating estimates thrice.

ITT has a long-term earnings growth expectation of 15%. It has a positive earnings surprise history with an average of 6% for the trailing four quarters, beating estimates thrice.

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