Leucadia Subsidiary Jefferies Posts Weak Q4, Outlook Solid - Analyst Blog

Leucadia National Corporation's (LUK) wholly owned subsidiary, Jefferies Group LLC, recently reported its fourth-quarter (ended Nov 30, 2014) results for fiscal 2014. The company reported adjusted net earnings of $19.2 million, down compared with $136.8 million in the year-ago quarter. For fiscal 2014, Jeffries' adjusted net earnings came in at $324.8 million.

The adjusted earnings figure excludes the operating results of Jefferies' Bache business. The company is in pursuit of strategic alternatives for this business, especially due to its difficult growth and margin conditions.

Adjusted revenues amounted to $494 million, down 45.4% year over year.  As reported, Equities revenues totaled $158.5 million, Fixed Income revenues were $61.4 million and Investment Banking revenues were $316 million. For fiscal 2014, total adjusted revenues were $2,827.6 million.

In fiscal fourth-quarter, Jefferies' total non-interest expenses declined 33.5% year over year to $463.6 million. Adjusted operating margin in the quarter came in at 6.1%.

Notwithstanding the weak fourth quarter, Jefferies is hopeful of solid results in the quarters ahead.

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 markets operations. Revenues generated from this business accounted for 28% of Leucadia's total revenue in second-quarter 2014.  

Leucadia currently has a market capitalization of $7.8 billion. The company primarily engages in beef processing, manufacturing and real-estate activities, along with various other investment-related affairs in the U.S.
 
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