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Leucadia Unit Jefferies’ Q3 Earnings and Revenues Up Y/Y


Leucadia National Corporation’s LUK wholly owned subsidiary, Jefferies Group LLC, recently reported third-quarter fiscal 2016 (ended Aug 31, 2016) results. The firm’s net earnings in the quarter were approximately $41.2 million, significantly up from $2.1 million in the year-ago quarter.

Net revenues were $654 million, increasing 13% from the year-ago tally of $578.9 million. The improvement was driven by increase in revenue from multiple sources including principal transactions, asset management fees and investment income from managed funds.

Of the total revenue generated, Equities revenues were $148.3 million, while revenues from Fixed Income were $195.3 million. Total investment banking revenue was $294.9 million. Revenues derived from asset management fees amounted to $15.9 million. In the fiscal third quarter, Jefferies’ total non-interest expenses inched up 0.3% year over year to $573.7 million.

Jefferies was merged with Leucadia in Mar 2013 to form a limited liability company, Jefferies Group LLC. It handles the company’s investment banking and capital market operations. Revenues generated from this business accounted for 22.7% of Leucadia’s total revenue in 2015.

Leucadia, with a market capitalization of $6.8 billion, currently carries a Zacks Rank #4 (Sell). The company is primarily engaged in beef processing, manufacturing and real-estate activities, along with various other investment-related affairs in the U.S. Over the last 60 days, the Zacks Consensus Estimate for Leucadia has decreased 15.4% to 11 cents for 2016.

Some better-ranked players in the industry include Barloworld Ltd. BRRAY, Crane Co. CR and Raven Industries Inc. RAVN. All these stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Sell) stocks here.

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