LUK Leucadia National Corp.

Leucadia National Corporation (LUK) posted robust first-quarter 2012 earnings per share of $1.97 compared with 5 cents reported in the year-ago quarter. Results also surpassed the Zacks Consensus Estimate of 40 cents.

Revenue

In the reported quarter, revenue reached $2.4 billion compared with $284.0 million in the year-ago quarter. The massive jump was attributable to addition of revenue contribution from National Beef Packaging Company, LLC.

Leucadia acquired a controlling interest in National Beef Packing Company, LLC in December 2011 and thus the company added a new segment ‘Beef Processing Services’ to its portfolio.

During the quarter, revenue from Beef Processing Services segment accounted for 73.9% of total revenue and settled at roughly $1.8 billion. Revenue from the Manufacturing segment was approximately $61.7 million, down 3.3% year over year and accounted for 2.5% of total revenue. Oil and Gas Drilling segment accounted for about 1.6% of revenue and was $39.0 million.

Revenue generated from the Gaming Entertainment Operations was roughly 1.3% of total revenue, and stood at $32.1 million, while revenue of $3.4 million from the Domestic Real Estate segment accounted for 0.14% of total revenue.

Revenue from the Medical Product Development segment was $74 thousand. Proceeds from Other operations were $19.0 million, up from $16.1 million in the year-ago quarter and accounted for about 0.78% of total revenue, while the Corporate segment revenue of $477.0 million accounted for about 19.7% of total revenue.

Expenses/Margins

Expenses in the quarter showed a drastic hike from a mere $204.5 million in the first quarter of 2011 to approximately $2.1 billion in the reported quarter. The massive increase stems from $1.8 billion cost of sale related to the company’s beef processing services. In relation to revenue, expenses represented 85.2% compared with 72.0%in the year-ago quarter.

Balance Sheet

Exiting the first quarter, Leucadia’s cash and cash equivalents jumped 21.8% sequentially to $205.3 million while its long-term debt plummeted 24.0% to $1,425.2 million from $1,875.6 million in the previous quarter.

Cash Flow

Cash flow from operating activities was a net outflow of $42.7 million for the first quarter of 2012, an increase from $17.8 million outflow reported in the year-ago quarter. Spending on property, equipment and leasehold improvements came in at $18.6 million versus $4.1 million in the comparable quarter last year.

Leucadia is engaged in manufacturing, telecommunications, oil and gas drilling services, property management and services, gaming entertainment, real estate activities, medical product development operations and various other investment-related activities in the United States. The company faces competition from other companies like Apollo Investment Corporation (AINV) and The Blackstone Group (BX).

 
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