Leucadia National Corporation (LUK) reported its financial results for the fourth quarter and the fiscal year 2010 on February 25, 2011. In the fourth quarter, the company generated a net income (from continuing operations) of $6.77 per share, up compared with a net loss of 34 cents per share in the year-ago quarter.
In the fiscal year 2010, net income from continuing operations was $1,891.4 million or $7.66 per share, up compared with $533.7 million or $2.18 per share in the previous year. The improvement can be attributed to significant revenue growth and tax benefits, offset partially by higher expenses in the year.
Revenue
In the fourth quarter 2010, revenue jumped significantly year over year to $585.6 million from $192.8 million in the year-ago comparable quarter. Revenue in the fiscal year 2010 was $1,320.0 million, up compared with $575.2 million in the previous year. The improvement was attributed to strong performances across all segments.
In the fiscal year 2010, revenue from the Manufacturing segment was $260 million, up 15.7% year over year and accounted for 19.7% of total revenue. Oil and Gas Drilling segment accounted for 8.8% of revenue and totaled $116.6 million.
Revenue generated from Gaming Entertainment operationswas roughly 8.7% of total revenue, and increased 10.8% to $114.8 million, while revenue of $17.1 million from Domestic Real Estate segment accounted for 1.3% of total revenue.
Revenue from Medical Product Development segment slipped to $0.1 million from $5.1 million in the year 2009. Proceeds from Other operations were $67.1 million, up from $51.8 million in 2009 and accounted for about 5.1% of total revenue, while corporate segment revenue of $744.3 million accounted for 56.4% of revenue.
Expenses in the fiscal year 2010 increased 16.5% year over year to $951.0 million from $816.4 million in the year 2009. In relation to revenue, expenses dipped to 72% from 142% in the earlier year.
Balance Sheet
Exiting the fourth quarter, Leucadia’s cash and cash equivalents went up 36.5% sequentially to $441.3 million, while its long-term debt dipped by 3.7% to $1,548.5 million compared with $1,608.4 million in the previous quarter.
Cash flow from operating activities was a net inflow of $431.3 million in 2010 compared with a net outflow of $133.4 million in the previous year. Spending on property, equipment and leasehold improvements increased in the year to $44.3 million compared with $23.6 million in the previous year.
In the fiscal year 2010, the company paid dividends totaling $61.0 million and issued common shares worth $11.3 million.
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 activities in the United States. We currently maintain our Neutral recommendation on Leucadia.
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