Leucadia (LUK) Beats Q1 Earnings Estimates, Revenues Lag

Leucadia National Corporation (NYSE:LUK) reported solid first-quarter 2017 results with net income of $281.4 million or 75 cents per share, representing a significant turnaround from a loss of $222.9 million or loss of 60 cents 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 67 cents.

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.

Leucadia National Corporation Price, Consensus and EPS Surprise

Leucadia National Corporation Price, Consensus and EPS Surprise | Leucadia National Corporation Quote

Moving Forward

Leucadia currently sports a Zacks Rank #1 (Strong Buy). Some other stocks worth considering in the industry include Bunzl (LON:BNZL) plc (OTC:BZLFY) , Carlisle Companies Incorporated (NYSE:CSL) and Crane Co. (NYSE:CR) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Bunzl has a long-term earnings growth expectation of 7.5%.

Carlisle has a long-term earnings growth expectation of 16%. It reported a positive average surprise of 11.1% in the trailing four quarters, beating estimates in each.

Crane has a long-term earnings growth expectation of 10.1%. It posted a positive average surprise of 8.4% in the trailing four quarters, beating estimates in each.

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